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

To: Bill Fischofer who wrote (5942)	6/5/1999 10:46:00 PM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

Bill, You are referring to switching costs. For CF there really are not any impediments for switching as you define them. The only analogy which I can make would be the adoption of an encryption algorithm that would leverage the serialization feature in the CF and MMC product lines. If content providers found this to be an acceptable solution it could potentially lock-in CF as the removable storage of choice. This assumes that a second encryption technique favoring an alternate storage medium does not exist or is prohibitive. Unfortunately, this same argument does not pertain to digital photography. I believe that one of the costs of switching may rest on the shoulders of OEM's. I believe that as time passes the buying public will be spending a significant amount of money on CF cards, card readers and, most importantly, electronic devices which use these cards. Also, there are sister industries which are producing such things as pager modules, phone modems, cellular phone modules, LAN cards and the like to CF standards. Thus, there is a certain economy in having a defacto standard such as CF for the OEM. Also, there will be hell to pay if the industry suddenly decides on a new defacto standard and renders worthless the consumer investments to date. I do share your concerns about the apparent low threshhold for swithching. Basically, anything you can fit into a CF slot is a threat to CF. Thus, you need to factor this risk into your comfort with this investmetnt. Personally, I do believe that it would be unlikely to have the CF standards abandoned in the foreseeable future. Ausdauer