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

To: Ausdauer who wrote (2823)	4/16/1998 10:16:00 AM
From: Jerome Wittamer	Respond to of 60323

Here are a few excerpts (with my comments) of the news release which I found of importance : "Product gross margin decreased to 30% from 32% in the prior quarter due primarily to competitive pricing in the market place." This was anticipated and should continue in the future at an accelerated pace with regard to lower capacity cards and at a similar pace with regard to higher capacity card. Indeed, Harari also stated, ''We are encouraged by new high resolution digital camera models announced late in the quarter by Canon, Kodak, Konica, Hewlett Packard and Vivitar. These models are scheduled to hit the store shelves in the second quarter of 1998, and are expected to generate increased demand for our high capacity cards.'' The market for high capacity cards is for the time being the propriety of SanDisk. The company does not face stiff competition in this area. In the future, expect some "retaliation" from competitors such asToshiba. "During the quarter, the Company began volume shipments of the industry's highest capacity CompactFlash cards --the 30, 40 and 48 megabyte (MB) cards." This is clearly an area in which revenue sales can be made this year. As regards the overall business environment, Harari pointed that :''Business conditions in the just concluded quarter were weak particularly in Japan and Europe'' .''The first quarter is historically weak because of the seasonal nature of the consumer electronics market. Sales to Japan were approximately 40% lower than in the fourth quarter of 1997, accounting for the majority of the decline in first quarter product sales. Bookings strengthened in the second half of the quarter, although bookings visibility remains limited.'' Obviously, SanDisk's sales in Japan were key to the '97 financial results. We should keep this in mind when witnessing serious economical damage in Japan. Finally, a positive note : "The Company continues to experience strong design-in activity for CompactFlash, ChipSets and MultiMediaCard products in numerous consumer, industrial and communications applications."