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

To: Sam who wrote (21024)	10/22/2001 3:02:02 PM
From: Bruno Cipolla	Respond to of 60323

re: GSM and Mpeg GSM subscribers top 600 million worldwide GSM will have a 70% share of the total digital wireless market, which is expected to reach 1 billion customers by year end. totaltele.com Mpeg2 DVD quality requires 1 to 1.2 Megabytes/sec A Digital cam Video Recorder may require twice as much B.

To: Sam who wrote (21024)	10/23/2001 12:18:34 AM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Sam, I think your analysis of Lexar's last Q is accurate. They have whittled down inventory, but they are buying flash on a consignment basis and will need to spend cash to build the inventory back up. If they have $6 million in inventory and want to sell $20+ million in flash cards over the holiday quarter they are going to have to pay someone for raw materials. To this end they opened a $10 million credit line, of which they have already drawn down $2 million dollars. Going forward, I think SanDisk and a few other CF manufacturers will offer professionals a second source for premium grade CompactFlash cards. This is Lexar's only true niche at the consumer level. The Lexar shareholder's value has decreased substantially as the proceeds from the IPO dwindle. They have lawsuits against 5 competitors which will be a cash drag it they go to trial. They also sold infringing technology to Viking and didn't sign a licensing/supply agreement for the "non-infringing" controler with Viking until July or August of 2001, suggesting that Viking had been selling infringing technology unabated for some time. All SanDisk will need to do is produce some Viking cards with the offending Lexar controller inside and refer to the settlement from a year ago. I think that will really hurt. I also got the distinct feeling that Sony is starting to snuggle up to SanDisk. Despite its relationship to Toshiba and Matsushita, SanDisk has the potential to win over Sony's faith. It will be much easier for Sony to try to negotiate a flash memory agreement with SanDisk than with a Japanese or Korean competitor. Lexar has stated in the c.c. that they believe all NAND-based flash cards, irrespective of form factor, "run into" Lexar's IP in some fashion. They did not elaborate. I guess that means they are going to sue Toshiba as well. Well, I hope they have deep pockets. The deferred revenue may be pre-paid license fees or card sales which cannot be booked until product is sold to end-users. I consider increasing deferred revenues as a positive, actually. Best, Aus