) has introduced an enhanced version of iNAND Extreme flash
drive, which is compatible with
) new Atom Z3000 processors, also known as 'Bay Trail' for
tablets. The new iNAND Extreme's 128GB storage space and high
read/write speed will complement Atom Z3000's performance.
The iNAND device enables faster application loading, speedy
data synchronization in the cloud and higher streaming
capabilities for an enhanced user experience. Apart from the
tablets, it can also be used for smartphones and other mobile
Moreover, Intel's Atom processors have received positive
response from tablet makers. Reportedly, companies like Asus,
), Lenovo, LG and Toshiba are developing devices based on the
Atom Z3000 architecture.
Thus, it is a prudent decision for SanDisk to produce 'Bay
Trail'-compatible storage devices and gain from the current surge
in demand for tablets. According to Gartner, tablet shipments are
expected to grow 67.9% in 2013 to 202 million. Another research
firm, Strategy Analytics, expects tablet shipments to be 180
million in 2013.
We believe that the synergies with Intel's Atom processors and
its greater adoption rate will provide greater stability to
SanDisk's revenue stream. We are also positive about SanDisk's
focus on mobile-embedded products (as several new smartphones and
tablets, Ultrabooks and other end-client PCs running on SSDs are
slated for launch).
SanDisk expects its SSD segment to grow to around 35% of its
sales by 2016. The company also expects total SSD contribution to
be 25.0% of total revenue in 2014.
However, lackluster PC sales, European issues, stiff
competition from Western Digital Corp. and Seagate Technology plc
(in the SSD segment) and currency fluctuations are concerns in
the near term.
Currently, SanDisk carries a Zacks Rank #3 (Hold).
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