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

To: Michael Kim who wrote (12282)	6/27/2000 1:22:00 PM
From: Ausdauer	Read Replies (3) \| Respond to of 60323

Mike, The good news is that there was no announcement of a hostile takeover bid by Intel... ...or we would be testing new lows. THE PALM ANNOUNCEMENT IS MAJOR NEWS FROM A FUNDAMENTAL STANDPOINT. SANDISK'S PRODUCTS ARE NOW IN A LARGE ARRAY OF DIGITAL CAMERAS & MP3 PLAYERS AND NOW ENJOY MAJOR ENDORSEMENTS BY THE PALM COMPUTING PLATFORM, PSION LLC AND MICROSOFT'S POCKET PC PLATFORM. DON'T FORGET ABOUT QCOM'S RECENT MAJOR ENDORSEMENT OF MMC AS WELL. What is left to conquer at this point? Oh yes, Transmeta and the mobile Linux OS. The SanDisk Paradox lives!!! Ausdauer SanDisk...like a chocolate covered cherry, but sweeter.

To: Michael Kim who wrote (12282)	6/27/2000 1:53:00 PM
From: Art Bechhoefer	Respond to of 60323

Michael, the consumer confidence numbers appear to be affected mainly by the higher price of fuel, especially gasoline. To the extent that this means less consumer spending on consumer items, it also means a lower probability that the Federal Reserve will increase interest rates beyond their current level. As to how all of this might affect SNDK, I can see both favorable and unfavorable impacts. Since demand for flash memory exceeds available capacity, a reduction in demand, unless it is huge, will have little or no impact on unit sales or prices per unit, at least for the next six months. Since several companies are increasing their facilities for making flash memory, eventually we could see some initial overcapacity and price cutting, but this situation will probably not occur for another year or perhaps even longer. Meanwhile, as often happens with new technology, improvements in production and technology often bring the price down, thereby increasing consumer demand. Here are three key trends that I see at this time: 1. The downward moving costs of small sizes of flash memory, up to about 32 mb capacity, increase the certainty that conventional photography for amateurs will decline rapidly over the next three years, confirming Eli Harari's earlier statement that by 2003, the only remaining viable market for conventional photography will be throw away cameras. Existing conventional cameras will be used, particularly in countries such as China, but eventually conventional film will become the exception, rather than the rule. 2. Digital cameras will be designed to work with wireless phones to transmit photos from camera storage to an online facility, whether it be an Internet Service Provider or the user's own e-mail file. This feature will have wide appeal as more people come to rely on wireless phones, instead of older wired phones. It will also ensure that smaller capacity flash memory will be sufficient to store a limited number of photo images until they can be uploaded via wireless connection to another storage facility. My source on this is a very recent conversation with a retired official from Kodak, who had a very high ranking position there. I think it is a good source. 3. Flash memory will be the technology of choice for storage of popular music (short selections, rather than the much longer selections typical of classical music) and many kinds of books, including textbooks. Flash memory will displace CD's as the technology of choice for popular music, since the fidelity is almost as good as CD and the convenience of having a player with no moving parts surpasses any CD advantage. Since consumers will want to keep their music and book selections, they will buy more flash units to store these selections, creating a very large aftermarket for MP3 players and the like. Conventional record/CD/book/video stores will become a relic of the past. As long as the SNDK patents hold up to challenges, as I think they will, I don't see any negative factors for SNDK for the foreseeable future. Would embedded flash memory be a low cost substitute for removable flash cards in, say, cameras with wireless photo transmission capabilities? Probably, but again, the wide acceptance of compact flash format precludes a major shift to another format in the near future. Art