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

To: limtex who wrote (13713)	8/8/2000 5:19:35 PM
From: Ausdauer	Read Replies (3) \| Respond to of 60323

Limtex, I will say that my post was unusually negative, but not my most negative contribution to date. Perhaps I feel more of a need now to balance comments since my allegiances have been challenged and my intentions put into question. Clearly if I were a SanDisk insider I would have all the answers to my questions on hand and would never felt the need to post at all about SanDisk's negative side. There are a lot of unanswered questions that remain. It has been my impression that SanDisk doesn't usually play a chess game with press releases designed to neutralize or counteract press releases from competitors. A weaker company my decide to defend itself by issuing numerous smaller or even repetitive posts in response. SanDisk's press releases are more often designed to highlight new, significant design-in wins, emphasize major events which have unfolded or chart strong currents that are propelling the company forward rather than be launched as a part of a damage control effort. We remain in a relatively narrow trading range with a high volume of the outstanding circulating shares being churned each week. I have resisted being drawn into this game and have kept my SanDisk chips off the table and safely secured, adding to my position when possible. The information not given in the Hitachi release has to do with SanDisk's relationship with Infineon. Before Siemens spun off its semiconductor division I was told by Cindy Burgdorf that MMC IP was divided into two halves. Siemens owned the licensing rights to the ROM version to be used for publication of content such as maps, phone directories, dictionaries, music... while SanDisk owned the licensing rights for the multiple read/write version sold as a "blank" for applications where permanency was not crucial. I suspect that Hitachi will end up licensing some MMC technology from Infineon and SanDisk depending on the application requirements. Also, the combination flash storage/controller used in the CompactFlash is also used in MMC, but on a smaller scale. Thus, although an open standard promoted by the MMCA, there is proprietary technology incorporated in MMC which SanDisk may employ to increase royalty revenues. The battle with Lexar in the CompactFlash arena may be an indicator that Hitachi will not give up without a fight. The fact that Lexar lost the infringement case with Lexar suggests that Hitachi may be less inclined to push the matter. They are already a SanDisk licensee and a short addendum to include MMC may be all that is needed. I doubt that it would be quite so simple. My major concern is that the investing public still remains confused about the segmentation of the flash memory markets. The fact that Solomon Smith Barney has demonstrated a fair amount of schizophrenia in this regard is just one indicator of the progress which still needs to be made. I personally believe that CompactFlash will continue to be the dominant player in the digital camera, handheld PC and portable computing markets. MMC will be a major Internet music and cell phone player. There may be a transition to MMC over time, but this transition will probably be slow. MMC, and anyone who stands to profit from the sale of MMC, will be the benefactor of this transition. SanDisk has, in part, attempted to clarify the future of MMC with their press releases on the SD memory card. (I think you need to read between the lines somewhat to understand the position they are in.) In doing they have demonstrated a great degree of concern and sensitivity for the interests of content providers, a consideration that will hopefully secure SDMC's position in future product design. I think there is still some educating to do about just how CF, MMC and SDMC will likely mature in their Post PC mega-markets. Additionally, a clarification of the IP issues related to MMC and SDMC would be helpful for new investors and SanDisk devotees as well. Aus (SanDisk $57 3/8)