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

To: Art Bechhoefer who wrote (15822)	10/20/2000 6:02:54 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

But the main reason is that many analysts, as Eli noted in the conference call, simply don't understand what SanDisk sells, and why SNDK products are different from, and aimed at different markets from those addressed by Intel, AMD, SSTI, etc. Art, I think that is part of the problem. I thought it was funny when some analyst asked if they were having trouble getting their hands on "2MB MMC". Eli asked him to repeat the question and I think the caller felt too stoopid to ask the same question again. Eli did a great job at pointing out some major events since Q2 including the recognition by Palm and Palm's leadership role in the SDA. He also mentioned the important (nascent) handset market which is poised to reach 1 billion units per annum in the not-too-distant future (according to the Yahoo! interview). The fact that SDMC/MMC compatibility is built into the basic chipsets is major news that many have forgotten. Likewise, if we can get HAND to make a CF or an MMC adapter for Springboard we will have universal support of SanDisk in the PDA arena! As I have already posted, Microsoft, Psion and (most recently) Palm have all endorsed SanDisk's flash cards. One area that probably has caused some confusion was the big jump in Q2 royalties. That was on the order of $8 million dollars above projections/Q1 guidance. Q2 and Q3 total royalty revenues amounted to over $40 million dollars. Had the order of revenue recognition been reversed we would have seen EPS of 31¢ in Q2 and EPS of 37¢ in Q3. Thus, earning would appear to be continuing on a more robust path compared to the sequential EPS of 33¢ and 35¢ that was reported. In short, Q2 was too damn strong!!! Because royalty revenues are estimated for the year and then adjudicated(?) only biannually it remains possible that more upside surprise is in store for Q4. The way the c.c. worded the projections was somewhat confusing to me. For Q3 they projected $17.0 to $17.5 million, but actually earned $19.0 after including the newest TDK and Hitachi agreements. Does that mean that those deals were only worth $1.5 million or so? I also left with the feeling that the strategy for leveraging the IP has changed as the latest Hitachi MLC deal was crafted to include a production quota (option) instead of cash. That is fine and I think Eli is very pumped up about the extra supply of flash, but why not at least attempt to clarify the IP licensing strategy for us who sit here in the dark? Also, why is there so much secrecy about "potential licensees". They could have spoken in general terms about CF assembly licensing and progress to date. I am planning to write to Mr. Calderoni for further information about this matter. I wish that the c.c. would devote a segment to helping investors and analysts understand the IP licensing strategy rather than letting us take stabs in the dark. All IMHO, Aus

To: Art Bechhoefer who wrote (15822)	10/20/2000 6:25:18 PM
From: Binx Bolling	Read Replies (2) \| Respond to of 60323

Art, you wrote, But the main reason is that many analysts, as Eli noted in the conference call, simply don't understand what SanDisk sells, and why SNDK products are different from, and aimed at different markets from those addressed by Intel, AMD, SSTI, etc. Art, can you blame the analysts for being confused when SNDK's SEC filings state that Intel is a competitor of SNDK? For example in the following 10Q SNDK writes: Our primary competitors include: o storage flash chip producers, such as Hitachi Ltd., Samsung Electronics Company Ltd. and Toshiba Corporation; o socket flash, linear flash and component manufacturers, such as Advanced Micro Devices, Inc., Atmel Corporation, Fujitsu Corporation, Intel The same SEC document goes on to say, We have entered into patent cross-license agreements with several of our leading competitors including, Hitachi, Samsung, Toshiba, Intel, SST and Sharp. The same SEC document also says, We also face competition from products based on multilevel cell flash technology such as Intel's 64 megabit and 128 megabit StrataFlash chips and Hitachi's 256 megabit multilevel cell flash chip. These products compete with our D2 multilevel cell flash technology. Multilevel cell flash is a technological innovation that allows each flash memory cell to store two bits of information instead of the traditional freeedgar.com Art, what is the controlling legal authority?