Food For Thought: Apple and the Flash Future of SanDisk

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SanDisk Flash Memory Future with Apple

SanDisk, world leader of flash memory, has the online world buzzing for more reasons than one. While its CEO Eli Harari is making his company departure, he’s riding out on top. SanDisk is on the cusp of a flash-bright future and could quite possibly be doing so with Apple at the helm, as online sources would imply.

Flash technology is synonymous with USB. The chips are responsible for storing the data that makes portables devices like smartphones and USB drives work. SanDisk is certainly in the driver’s seat when it comes to memory making. The company beat analysis odds with its latest gross profit margin at 52 percent.

Moreover, several factors are falling into place to suggest that über-popular Apple and storage innovator SanDisk are on the same path. First, the implementation of flash in iPods five years ago boosted SanDisk’s shares. Second, the lack of optical drive in the new MacBook Air with a switch to flash and USB storage only indicates a shifting trend for manufacturers.

One recent statement by Apple CEO Steve Jobs could be even more telling. Jobs says that Apple is “in a unique position” to seize “one or more very strategic opportunities” with its $51 billion cash cache. SanDisk is a logical Apple target according to Guru Focus. Flash technology has become the most important part of Apple products, making up a sizeable percentage of its devices’ basic costs. Apple also accounts for as much as an estimated 10 percent of global flash memory use.

According to Harari, SanDisk owns the most important flash patents and advancements that include 3-bit per cell technology, OEM applications, 3D flash and X4 technology. If Apple wants to corner a larger portion of the world’s flash use, it would have a greater edge with SanDisk’s premier patents.

The entire business of flash memory is gaining significant ground on its hard drive counterparts, that may be less expensive to produce, but are also prone to damage and wear due to their moving parts. Harari says that developing more compact technology like 20-nanometer flash is key to lowering cost-per-bit for computer storage to compete with hard drives and disk drives. Consequently HDD manufacturers are not necessarily cheering such flash memory possibilities.

LaCie’s top executive says to the Wall Street Journal, “The new announcement of the MacBook Air is really stabbing Seagate and Western Digital in the back. The market is moving from hard drives to flash much faster than it was expected six months ago.”

SanDisk’s retail, which includes USB flash drives and memory cards, makes up more than one-third of its sales. With Apple thrown into the mix, the prominence of not only flash but also USB devices will grow. As the leader of cutting-edge portable technology, Apple could give USB 3.0 the push it needs into the mainstream. No matter which way you look at it, one thing’s for certain: flash is here to stay.

Do you like the idea of a marriage between SanDisk and Apple? What do you predict for SanDisk’s future?

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