SanDisk Showcases New Products At CES 2015

SanDisk (NASDAQ:SNDK) made a bold statement at the Consumer Electronics Show (CES) 2015 in Las Vegas this week, announcing three new product launches targeting the end-user market space. The company introduced two new solid state drives (SSD) and a USB flash drive for Android products, similar to the iXpand flash drives it launched for Apple (NASDAQ:AAPL) products in November last year.

In the first part of this two-part article, we take a look at the newly introduced entry level solid state drive SanDisk SSD Plus, as well as the Ultra II mSATA SSD, a SSD for tablets and ultrabooks. Further, we take a look at SanDisk’s presence in the client SSD market space. In the second part of the article we will take a look at the flash drive market and SanDisk’s Ultra Dual USB 3.0. We currently have a $94 price estimate for SanDisk’s stock, which is roughly in line with the current market price.SanDisk’s stock price has risen by about 12% since the company announced its Q3 results in mid-October 2014.

See our complete analysis of SanDisk here

SSD Plus And Ultra II mSATA SSD

The SanDisk SSD Plus is a 2.5-inch form factor entry level drive to be used in computers. Unlike the latest SanDisk products, the SSD Plus is not built on its TLC (triple-level cell) NAND platform, but uses SanDisk’s second-gen MLC NAND technology. ^[1] On the other hand, the Ultra II mSATA is designed for use in thin notebooks and tablets, with a storage capacity ranging from 128GB to 512GB. The Ultra II can offer a read speed of up to 550 MB per second, yet consumes nearly the same amount of power as other entry-level SSDs. ^[2] mSATA, or Mini-SATA, is a comparatively newer connectivity option, primarily used for small sized SSDs used in ultra thin notebooks or tablets. The Ultra II mSATA is based on the same architecture as the Ultra II SSD launched by SanDisk in September last year. ^[3] Although only a few laptops offered mSATA connectivity initially, the trend is changing as more laptop manufacturers are making the mSATA connectivity available in their laptops. ^[4] The number is likely to rise further as mSATA enters the mainstream and gains popularity among users.

The company has priced the SSD Plus at $70 and $110 for the 120GB and 240GB versions, respectively, which translates to about 45-60 cents per gigabyte. Additionally, the Ultra II mSATA SSD is priced at $74, $116 and $221 for the 128GB, 256GB, and 512GB models, respectively, translating to a similarly modest 45-60 cents per gigabyte. This price range makes these entry-level SSDs an attractive buy for customers.

Solid State Drive Division

According to our estimates, the Solid State Drive segment is SanDisk’s most valuable division, making up over 36% of the company’s net value. This has also been the fastest growing segment within the company, with revenues generated through the first three quarters of 2014 growing by nearly 65% over the comparable year-ago period to $1.4 billion. ^[5] In addition to fueling SanDisk’s top line growth, this division also adds to the company’s overall profitability as SSDs are high-margin products. The industry-wide transition from traditional hard drive storage to solid state drives led to strong demand for SanDisk’s product offerings.

SanDisk estimates that the total addressable market for client SSDs (for tablets, laptops and smartphones) will grow from a $6 billion market in 2013 to just under $8 billion by 2017. ^[6] The company had a 15% share in the market in 2013, generating almost $1 billion in client SSD revenues. The introduction of the entry-level SSD Plus for computers and the Ultra II mSATA SSD for tablets and laptops should help the company gain share in this competitive domain. We currently forecast SanDisk to grab more than a fifth of the market through the end of our forecast period. You can modify the interactive chart below to gauge the effect a change in the company’s market share in the client SSD market would have on our price estimate for SanDisk.

Read part two of the article here to have a look at SanDisk’s newly introduced flash drives for Android devices – the Ultra Dual USB 3.0.

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1. Sandisk Announces Entry Level SSD Plus Ultra II mSata, Anand Tech, Janauary 2015 [↩]
2. SanDisk Drops Three New Products at CES 2015, F Stoppers, January 2015 [↩]
3. SanDisk Ultra II 240GB SSD Review, Anand Tech, September 2014 [↩]
4. mSATA SSD Compatibility List, My Digital Discount, December 2014 [↩]
5. SanDisk Quarterly Metrics, SanDisk Investor Relations, October 2014 [↩]
6. SanDisk Investor Day Presentation 2014, SanDisk Investor Relations, May 2014 [↩]