Flash memory storage solution provider SanDisk Corp.SNDK recently unveiled a set of intelligent NAND flash solutions - SanDisk Industrial - that would improve the computing and mobile computing experience, thereby meeting the growing storage demands of connected industrial applications. Expected to be available worldwide soon, these new flash storage devices will boost the company's SSD product portfolio.
The new SanDisk Industrial portfolio comprises SanDisk SD cards, SanDisk microSD cards and iNAND embedded flash drives (EFD) with a storage capacity of up to 64GB. SanDisk believes that the drive offers faster speed, quick response system and energy efficient features. However, it has not disclosed the price of the product yet.
These new solutions will help consumers accelerate the processing speed of notebooks/desktops externally. Apart from this, the drive can be used with applications such as Digital Signage, Point-of-Sale ("POS") and Surveillance Systems. It is an ideal solution for high temperature factory applications (ranging from -40oC to 85oC), enhancing their overall drive capacity, reliability and performance.
The new products are aimed at further innovation in memory technologies, which in turn will strengthen the company's product portfolio. We believe that the momentum from the launch of the SanDisk Industrial suite will help the company to emerge as a major player in the fast-growing storage market, thus lending greater stability to its revenue stream. Additionally, this will help SanDisk gain new customers, going forward.
A NAND device enables faster application loading, speedy data synchronization on the cloud and higher streaming capabilities for an enhanced user experience. We believe that SanDisk's entry into the NAND space can increase its market share.
As per the senior director of Industrial and Connected Home Solutions at SanDisk, "We have architected our new high-endurance SanDisk Industrial flash storage portfolio to be the ideal storage for the growing 'Industrial Internet of Things' market."
According to research firm Gartner, the Internet-connected things will be more than humans by 2020, with a ratio of 4:1. Furthermore, Gartner stated, "IoT adoption is growing, with manufacturing and utilities estimated to have the largest installed base of things by 2020.
Also, according to research firm IDC, as reported by the Wall Street Journal, the Internet of Things (IoT) market could nearly triple in the coming years. In 2014, the global IoT market was worth $655.8 billion, but it could reach up to $1.7 trillion by 2020.
We believe that by adding Industrial IoT into its existing solutions, SanDisk will gain the most from its continued proliferation. Also, we believe that with continuous enhancement in its product portfolio, SanDisk can capitalize on this opportunity.
Nevertheless, anticipating a significant decline in client SSD revenues due to enormous customer shift, the company issued tepid fourth-quarter guidance 2015 revenue outlook. Also, declining price per gigabyte, primarily due to unfavorable product mix, could impact the company's results.
Going forward, lackluster PC sales, competition from Micron Technology Inc. MU and currency fluctuations remain headwinds. However, we remain positive on management's expectations of a turnaround in the coming quarters and strong secular demand for its storage products.
It is also worth mentioning that Apple Inc. AAPL is currently a major customer of SanDisk. Hence, we believe that price and cost benefits as well as a long-term NAND supply agreement with a company like Apple will help SanDisk to outperform in the NAND market.
Currently, SanDisk has a Zacks Rank #3 (Hold).
A better-ranked stock in the technology sector worth considering is Juniper Networks, Inc. JNPR , sporting a Zacks Rank #1 (Strong Buy).