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

To: Jason Rooks who wrote (16633)	11/15/2000 4:44:07 PM
From: Art Bechhoefer	Respond to of 60323

Jason, if I recall correctly, the SNDK conf. call noted that most of SNDK sales are OEM, with compartively few to retailers. We know that OEM covers typically 8 and 16 mb units, where prices are dropping simply because the yield on wafers and other manufacturing efficiencies are helping drop prices. We also know that the higher end units sold at retail have not seen comparable price drops. In fact, the 96 mb CF I bought in July '99 cost LESS than comparable units I've priced recently. This suggests to me that there is some price cutting, but not necessarily margin reductions for OEM units, together with much larger sales volume. At the retail level, demand appears to be so good that it isn't necessary to cut prices, and in addition, the higher capacity units sold at retail carry a much higher profit margin.