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

To: Jim Greif who wrote (21269)	12/4/2001 6:03:52 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Jim, I agree with your points, but I think Art made some important observations as well. I don't know what value developing a brand name has currently. It will cost a ton to build it up and I am not sure the average consumer places the same weight on digital film quality as it did on 35mm film quality when Kodak was king and most everyone trusted the crimson "K" on the golden box. Look at most younger consumers now and you'll realize that you can't market flash media like you can sneakers or blue jeans or skateboards or cell phones. Digital flash film, although enabling, just isn't a make-or-break item and I think it will be difficult for a single manufacturer to dominate unless domination is based on cost and, to a lesser degree, performance and reliability. That is not to say that SanDisk should bury its brand name behind some private label. I think that they should still try to promote cards of SanDisk origin with SanDisk merchandising. My approach would be different. I would try to win over retailers and e-tailers by being a complete solution, by offering a wide assortment of card types, by offering the most competitive pricing/greatest profit margins, and by being the most reliable supplier. They need to win over major retailers like BestBuy, Circuit City, Office Max, Target, Walmart... and be the supplier of choice to the Amazon.com's, Buy.com's, PCMall.com's of the Internet. Behind the scenes they continue to groom their relationships with the telecoms and industrial partners, as well as OEM giants like HP, Compaq, Casio, Palm... who will be supplying business customers with handheld solutions over the next decade. I agree with Art that aligning oneself with fixed, mall-based retailers like Ritz and Wolf are less likely to bear fruit as more and more consumer electronics purchases are transacted on-line. The profitability of such private label relationships (like Lexar's deals with CompUSA and Ritz) seem questionable when one factors in the cost of labelling, shipping and managing separate inventories at same stores. I also question the reasoning behind supporting mall-based film developers while at the same time embarking on a kiosk-based approach to print management. It is really quite a mess. Aus