Mobile Growth Could Spur Uptick in SanDisk's Market Share

| About: Western Digital (WDC)
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SanDisk’s (SNDK) market share in mobile phone flash cards declined in recent years from an estimated 41% in 2005 to 32% in 2008, [1] due to a steep decline in retail flash sales in the US offset by stable retail share in Asia and moderate gains in retail share in Europe. However we estimate that market share stabilized at 32% last year and could increase slightly in the coming years.

SanDisk competes with other companies that make memory chips or storage devices like Micron (NASDAQ:MU) and Samsung Electronics (SEO), Western Digital (NYSE:WDC), Seagate (NASDAQ:STX) and EMC (EMC).

We estimate that mobile phone flash memory makes up 43% of our current price estimate of $50 for SanDisk’s stock, which is about 31% above the current market price of $38.

Performance Helping Demand

SanDisk’s memory cards have faster read and write speeds than many competing products, particularly at larger storage capacities. For instance, in one performance test of 16 GB SanDisk Mobile Ultra microSDHC card vs. Kingston 8GB microSDHC card conducted by, SanDisk cards demonstrated ~25% faster read speed and ~50% faster write speed compared with competing products.

Going forward, we expect SanDisk mobile phone flash memory market share to increase slightly over the forecast period. As pointed out by the management in its recent earnings call, the opportunity of an expected 1.2 billion handsets being sold this year overshadows any other consumer or computing market opportunity and SanDisk is well positioned. [2]

While our current forecasts call for stable growth, we note that if its flash market share reaches past levels of near 42%, this adds just under 10% to our price estimate.

Above shows the average forecast among Trefis members for SanDisk mobile phone flash memory market share, which is roughly in line with our estimates. You can drag the forecast trend-line above to express your own view, and see the sensitivity of SanDisk’s stock to mobile phone flash memory market share


1. We have estimated SanDisk’s Mobile Phone Flash Memory Market Share as: (SanDisk Mobile Phone Flash Cards Units Sold) / (Global Mobile Phone Flash Cards Units Sold). We have taken data on SanDisk’s Mobile Phone Flash Card sales from the company’s Analyst Day Presentation. We estimated Mobile Phone Flash Cards Sold Worldwide as: (Flash card penetration) x (Global Mobile Phone Units).

We have estimated Flash Card penetration as: (Slot Penetration Rates) x (Card attach rate). Data on Global Mobile Phone Unit sales is taken from publicly released information from market research firm Gartner.

2. See earnings transcript

Disclosure: No position