SanDisk Continues To Revamp Removable Storage Product Line, Reveals 200 GB microSD Card

SNDK: SanDisk logo

Over the last few years, SanDisk (NASDAQ:SNDK) has witnessed a declining revenue mix of its core offerings such as removable storage cards for smartphones, tablets, cameras and other digital media devices. The contribution of removable storage to SanDisk’s net revenues has gone down from 58% in 2011 (or $3.5 billion out of $5.7 billion) to 38% in 2014 (or $2.5 billion out of $6.6 billion). [1] The company has made attempts to boost removable storage revenues in the long run, with a revamped product line and newer products to attract customers. SanDisk launched the iXpand flash drives for Apple devices and USB flash drives for Android-based devices in the last few months and more recently introduced flash memory cards designed for use in the automobile industry. To add to this, the company announced a capacity increase in its microSD cards from the existing 128 gigabytes (GB) to 200 GB. [2] The card is scheduled for release in the second quarter this year.

See Full Analysis For SanDisk

The World’s Highest Capacity MicroSD Card

Relevant Articles
  1. SanDisk Beats Consensus On Revenue, EPS As Removable Storage Sales Rebound
  2. SanDisk Earnings Preview: SSD Sales To Continue To Drive Results
  3. How Has SanDisk’s SSD Division Performed Over The Last Few Years?
  4. What Is SanDisk’s Fundamental Value Based On Expected 2016 Results?
  5. What Will SanDisk’s Revenue And EBITDA Look Like In 5 Years?
  6. SSD, Embedded & Removable Storage: What’s SanDisk’s Revenue & Earnings Breakdown?

Back in February last year, SanDisk made its first capacity upgrade in a microSD card in over three years when it launched the 128 GB card, which at the time was the world’s highest capacity microSD card. Scaling up the capacity of the cards from 64GB to 128GB was a difficult task by itself, as the small dimensions of a standard card offered little scope for expansion. This was evidenced by the fact that it took almost three years to come up with a technology to double the existing capacity. MicroSD cards are universally available in a standard 11mm*15mm dimension, which is just about as big as a fingernail. Given the small physical size of microSD cards and minimal scope of scaling up, their capacity had been limited to 64 GB from 2011 to 2014.

SanDisk’s recent capacity upgrade to 200 GB builds on an already strong foundation laid out by the 128 GB card launched last year. [3] The company has used the same technology in the 200 GB edition. In addition to contributing to product sales, the new technology could continue to fetch royalties for the company in the near term.

Traditionally, one of the key issues with high-capacity storage cards has been low data-transfer speeds, but SanDisk claims that the read/write speed of the Ultra MicroSDXC is higher than a standard microSD card at 90 MB/sec. [4] This transfer rate roughly translates to copying about 1,200 photos per minute. The card can also be used with an app specifically designed for transferring data to and from the internal storage memory of mobile devices. When the threshold for optimum memory is exceeded in mobile devices, the app can automatically transfer data from the internal memory to the microSD card.

In terms of pricing, the 200 GB memory card is initially launched at $400, which translates to just over $2 per usable GB. This seems steeply priced, but the prices are likely to fall as sales volume rises. When the 128 GB card was released, it was priced at $200 initially, or just over $1.5 per usable GB. Within a couple of weeks of its launch, the product price declined to as low as $120 and it’s currently available for as low as $100. [5]

Addressable Market For MicroSD Cards

The 200GB SanDisk Ultra microSDXC card largely targets Android-based portable devices such as tablets and smartphones. However, some of the major Android smartphones such as the Google (NASDAQ:GOOG) Nexus are not available with a card slot. Furthermore, Samsung (PINK:SSNLF) recently unveiled its latest high-end smartphone, the S6, without an expandable memory slot. [6] As a result, users choose pre-specified storage options for portable devices with storage ranging from 8 gigabytes to 128 gigabytes. Cloud storage providers such as Google, Apple and Microsoft (NASDAQ:MSFT) want users to get used to the idea of cloud-based storage  offered through Google Drive, iCloud or SkyDrive. Furthermore, the read/write speeds for embedded flash storage are much faster than add-on storage, making these devices much faster and theoretically more efficient than corresponding devices running apps/reading data from microSD cards. If this concept becomes popular among other smartphone manufacturers such as LG and HTC, it could limit the potential market size for these cards.

On the other hand, high capacity memory cards are likely to continue to be used in other consumer electronic devices such as cameras, camcorders, portable music players and tablets. According to IDC forecasts, 7 out of 10 photographs currently captured in the world are taken using cameras in smartphones or tablets. This could rise to 9 in 10 photographs by 2019. [2] With the growing presence of high-definition content and high-resolution images, it makes sense for storage companies to increase storage capacities in proportion. According to the latest IDC forecast, smartphone sales are likely to grow at a CAGR of 9.8% from 2015 through 2018, with a base figure of 1.4 billion smartphone sales in 2015, while tablet sales to grow at about 5% annually from 235 million units sold in 2015 to 286 million tablets sold in 2018. [7] [8] Although some key high-end smartphones are likely to eliminate external storage card slots from their devices, most low-end smartphones could continue to offer them. Since much of the growth in smartphone/tablet sales is expected in Asia Pacific region with low-end smartphones driving growth, it is likely to offer a significant market size for SanDisk to cater to. [9]

View Interactive Institutional Research (Powered by Trefis):
Global Large CapU.S. Mid & Small CapEuropean Large & Mid Cap
More Trefis Research

  1. SanDisk Quarterly Metrics, SanDisk Press Release, January 2015 []
  2. SanDisk Unveils the World’s Highest Capacity microSD™ Card, SanDisk Press Release, March 2015 [] []
  3. SanDisk Introduces Highest Capacity 128GB Memory Card, SanDisk Press Release, February 2014 []
  4. SanDisk new microSD card packs a whopping 200GB of storage, PC World, March 2015 []
  5. SanDisk 128 GB MicroSD Card, BestBuy, March 2015 []
  6. Samsung Galaxy S6 Product Details, GSM Arena, March 2015 []
  7. Worldwide Smartphone Sales Forecast, IDC Press Release, December 2014 []
  8. Worldwide Tablet Sales Forecast, IDC Press Release, November 2014 []
  9. With Mobile Internet Ad Spending Growth of 210%, China Is The New Leader In The Industry, Daze Info, September 2014 []