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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: D.B. Cooper who wrote (10836)	5/7/2000 5:08:00 PM
From: orkrious	Read Replies (1) \| Respond to of 60323

Digital Music Awaits New Wave of Rios By RICHARD SHIM ZD Network News interactive.wsj.com subscribers only The handheld MP3 music-player market has only one million users -- but don't expect it to stay stuck there, once a few thorny issues are resolved. "That figure could grow as high as three million overnight if digital rights management and codec [compressor-decompressor] issues clear up," said Dataquest Inc. analyst Van Baker. Those are the barriers facing MP3-related devices right now, but a major player in the field, S3 Inc.'s Diamond Multimedia -- seller of 500,000 Rio players, or roughly half the current market -- remains undaunted. The company has announced plans to expand its line of Rio players, in the face of other competitors entering the online music fray. In addition to a new version of its popular portable MP3 player, the Rio 600, Diamond will release two home components: the Rio Receiver and the Rio Jukebox, plus a Rio car player. The Rio 600 and the home and car players are due out later this year. The strategy is to build off its existing base of a half-million Rio users. "This is a logical transition from the player to the rest of the world," said Mike Reed, S3's director of marketing. "We realize that there's lots of room for participants, but with a first-mover advantage and a long-term strategy, we hope to give users what they want." This early and aggressive stance and an expanding product line give Diamond a definite head start, said Dataquest's Mr. Baker. "Diamond is doing it right and leading by example." But the online market may have a ceiling because of the uncertainty surrounding digital files. Since there aren't standards for devices on how to encode and decode the music, and record companies are still battling over security issues, consumers are not sure which player to buy. Once standards are set, the market should grow rapidly. "The situation is similar to DVD and Divx. Once Divx died, DVD took off," Mr. Baker said. Napster's booming popularity is further evidence that the market is waiting for the floodgates to open. Mr. Baker predicts that once these issues surrounding digital music -- MP3, Windows Media Audio and RealPlayer files and the like -- are cleared up, it could account for as much as 80 percent of the music industry within five years. But that's a big "if." Without resolution, digital music is more likely to stay grounded at 5% to 25% of the total market.

To: D.B. Cooper who wrote (10836)	5/7/2000 6:18:00 PM
From: Ausdauer	Respond to of 60323

Don, I hope you don't misinterpret this remark, but... In the big picture it is a positive as it gives Scandisk a little more positive exposure to the general public, who probably don't have a clue about Scandisk. ...it seems there are still many people who need to be clued in. LOL Aus

To: D.B. Cooper who wrote (10836)	5/8/2000 9:43:00 AM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

Don, though I do not use technical analysis very much, it seems to me that SNDK is in a situation similar to QUALCOMM in February and early March, 1999, just prior to a stellar earnings statement and a patent lawsuit settlement with Ericsson, that ultimately made QCOM the best performing stock in the entire S&P 500. As you note, the inclusion of SNDK in the ML list shows the beginnings of some institutional interest. What impresses me at this point is not only the strong increase in unit sales but your more recent note indicating that SNDK is also providing chip sets for embedded applications. This latest press release says a lot. First, it says that SNDK is looking at markets other than compact flash and multimedia cards, which have specific physical formats and proprietary technology dealing not only with the electronics but the physical design as well. Embedded flash memory is an area that I expected would fall largely under the influence of companies such as Advanced Micro Devices. Now we know that SNDK is not about to relinquish this sector of the market. Second, the very fact that SNDK has agreed to supply chipsets to JUMPtec indicates that the Taiwan Semiconductor deal has led to very substantial increases in capacity for producing chipsets. Late last year, SNDK was selling everything it could produce in its factories in Taiwan and China. They could have sold more if they had the capacity. Now there is more capacity, and by early next year, the plant in Manassas, Virginia, owned jointly with Toshiba, will start producing. I don't know if Merrill Lynch understands, or even notes the significance of these developments, but what they suggest to me is that the current price around 90 will not stay there for long, even if the overall market for tech stocks is weaker than it was last year. Art