SanDisk CEO not worried about potential U.S. recession
Posted by: in Companies Competitive StrategyFiled under: Competitive strategy, Economic data, SanDisk Corp (SNDK)
SanDisk Corp. (NASDAQ: SNDK) has made its name in the consumer electronics arena mostly through flash memory products (like that card inside your digital camera). It is also the second-largest maker of digital media players, behind only Apple, Inc. (NASDAQ: AAPL) and its ubiquitous iPod.
But, as talk of a 2008 U.S. consumer spending slowdown make the rounds in the media (with some betting against it until later this year), SanDisk CEO Eli Harari believes his computer memory company will mostly be insulated from any slowdown effects in the U.S. He has a great reason too — for years, SanDisk has ensured that it grows international sales to diversify itself against a slowdown in any particular market.
Gee, what a novel idea. Harari recently said, “Two-thirds of our revenue in the third quarter came from overseas and this isn’t by accident . . . we’re completely driving market share outside of the United Says. If there’s to be a recession, we’re very well positioned.”
As long as international and U.S. consumer see a need to feed themselves more digital storage (phones, cameras, computers, you name it), SanDisk will be there to supply the demand and provide more product for less price over time. Unfortunately, SNDK investors aren’t recognizing this, as the company’s shares are trading at two-year lows on fears of an oversupply in the flash memory market, combined with fears of consumers curbing their digital memory buys. Hey, everyone — stop using all those gadgets and prove the market right, okay? Yeah, right.
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