SanDisk: No. 2 to the iPod -- and doing just fine

The San Jose Mercury News profiles flash-memory card maker SanDisk, which "has quietly become the No. 2 seller in the United States of the hottest tech trend -- digital music players." SanDisk is taking an Avis-like approach to being number 2 by offering an alternative to the ubiquitous iPod.

According to the article, "the company reported a record $2.3 billion in revenues for 2005, and sold a million digital music players during the recent holiday quarter. Apple, on the other hand, registered a whopping 14 million iPod sales during the same period.

ThinkEquity Partners analyst Eric Ross said, "MP3 players really aren't complicated to make, and it's a higher-margin way to sell flash memory."

Stephen Baker at NPD Group noted "SanDisk has also used its strong U.S. retail presence, built on the popularity of its USB flash memory drives and memory disks, to gain market share in digital music players"

Baker said, "They use their flash and USB products to help get good distribution for the MP3 players. When people are looking for something that is functional and relatively low cost, they have a great solution. They have a price advantage. They own the memory."

Shaw Wu at American Technology Research thought being "No. 2 in the digital music player business will be hard to sustain." He said, "Apple walloped everybody last quarter," and the new, lower priced iPods, "will make life harder for non-Apple vendors. If I were the competitors, I would be worried."