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

To: Ausdauer who wrote (21264)	12/4/2001 10:19:49 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

>> I think the Internet has changed the way people shop for home electronics.<< Aus, at least from what I've seen in the Rochester, NY area, the days of photo shops in malls (e.g., Ritz Camera and Wolff) are numbered. Lower priced digital cameras (up to about $300) are now more prevalent in discount department stores, office supply stores, or online sources. Anyone looking for higher priced digital cameras in most cases already owns a computer with Internet access and would buy ONLY from online sources (better prices and no sales tax). A manufacturer of flash cards, a key component for digital cameras, doesn't necessarily do itself a favor by agreeing to furnish private label cards to a concern such as Ritz. It generates volume with little profit. Of course, at a time when the foundrys are hurting, a fabless supplier is going to get very good wafer prices, lowering the cost of the item to a point where it still might make a little profit. It is clear that SanDisk is not choosing this strategy. Apart from supplying certain OEM firms with generally lower priced cards (maximum 32 mb capacity), it appears that SanDisk is trying to build a retail brand name so that it can sell some of its higher capacity cards at much higher profit margins. This may not work well as long as one can get exceptionally good prices from online discounters. In this regard, Amazon.com is selling all popular size cards up to 128 mb at $0.50/mb, according to some recent advertising material I received. The strategy that SanDisk apparently is following is similar to that adopted by Sony, when, back in the 1950's, it chose NOT to supply transistor radios with private labels but instead took the longer term strategy of creating its own brand name. Art