From SanDisk Corporation’s Q408 conference call: (SNDK)
Our fourth quarter revenue reflected solid sequential growth in our retail business, but weak OEM sales, particularly from our mobile handset customers… Our fourth quarter OEM revenue declined 21% sequentially and 48% year-over-year. Unit sales to mobile handset vendors were down both sequentially and year-over-year. We believe we maintained share in the mobile OEM market, but demand for mobile handset vendors reflected weak mobile phone sales and pricing was also aggressive.
We are expecting a subdued retail environment in Q1 and a continuation of weak OEM demand.
As handsets are commoditized and handset manufacturers are looking to reduce the bill of materials, would they prefer to just put a slot, a card slot, and have the customer decide how much capacity he or she wants to pay for, and that plays to our retail strength. I would say the fact that we are straddling both the OEM and the retail markets really give us a very unique vantage point.
So they’re going for smart phones:
Looking at the future opportunities, we continue to see immense potential for flash storage in new and existing growth markets, in particular portable computing and mobile handset storage. In 2008, most of the 750 million slotted mobile phones sold worldwide had less than 1 gigabyte of embedded flash memory. Handset vendors and network operations alike see higher capacity mobile cards as vital for enhanced multimedia and smart phone functionality, and consumers are beginning to use more of these high-capacity cards.