Zeev's Turnips Patch-No Politics (ZEEV)

[langostino]

Here's the SNDK URL I left out ...

For SanDisk's entry into the digital music player market ...
http://www.sandisk.com/corporate/press.asp

It's going to be interesting to watch this market evolve, but given Apple's propensity to be late responding to downward pricing pressure, and the music industry preparing to make a move to try and drive Apple and Microsoft toward a universal DRM standard, the door is open for a company like SanDisk to use its enormous advantages in industrial manufacturing of the overwhelmingly most expensive part of the package to maximum advantage.

I don't know if the SanDisk team has the know-how to enter the consumer electronics market as a product designer/provider/marketer instead of a component manufacturer, but there's at least a chance they'll do it well enough to have an impact. And there's a chance they might find a consumer electronics partner to help.

In the past 2 years, SanDisk has erected a massive retail distribution network. That is something of MAJOR value to the business that does not show up on the balance sheet. There is no question that a SanDisk branded digital music player could receive reasonably wide introduction via that same retail channel, whereas a couple years ago, there's no way it could be done. That is a LOT of profit potential that stays in SanDisk's bank that would otherwise have to be shared with a brand-name electronics retailer to get in their distribution network.

These are the things that don't necessarily show up in the basic numbers of a 10-Q. They are the way for those who know and understand a business to gain advantage by having a little vision and time horizon that stretches beyond a single quarter.