SanDisk founder and CEO Eli Harari holds one terabyte of flash memory during an interview about the future of the storage market. Photo: Jon Fortt.
Flash memory might rule the roost when it comes to gadget storage – all the sleekest devices from smartphones to the upcoming iPad use it – but it can be tough to make a profit selling the stuff.
No one knows that better than Eli Harari. As founder and CEO of flash memory maker SanDisk (SNDK), he has been through a roller-coaster year.
Late 2008 was the worst of times. In a race for market share, SanDisk and its rivals flooded the market with flash chips. That, combined with weak consumer demand from a global recession, sank prices and drove everybody into the red. “We had a period of irrational exuberance,” Harari says, borrowing a dot-com-era phrase.
More recently, though, the flash market managed to stage a comeback. SanDisk, along with other big flash producers including Samsung, Toshiba and Intel (INTC)/Micron, cut flash production last year, just before demand began to recover. Lower supply and higher demand helped usher in record revenues ($1.2 billion) and net income ($277 million) in the fourth quarter, and when I stopped by SanDisk headquarters this month to chat with Harari, he was still smiling about it.
“No one built new fabs in 2009, and we don’t think any are going to come onstream in 2010,” Harari says. Stable supply, of course, often means more stable prices.
But the good times might not last.
Toshiba today announced plans to spend nearly $9 billion to build a new flash memory manufacturing facility, calling it a necessary move to keep up with market leader Samsung. (UPDATE: The company later clarified its comments, saying it hasn't made a final decision about the timing of a new facility.) We’ve seen this movie before: It’s probably just a matter of time before others follow suit, raising the risk that in 2011, the market will once again be awash in cheap flash memory.
Harari? He’s sanguine about the market. While he can’t promise an end to market volatility, he has reorganized SanDisk so that it’s less beholden to the whims of the retail consumer. He’s done that by backing away from competing at the low end of the market for SD cards, beefing up his business selling white-label cards to wireless carriers, and extending his global network of folks who sell rebranded SanDisk cards in places where he had a weak presence before.
An example is the Chinese New Year business. “December and January has very active purchasing for that market, and the pricing is very good. February, China is basically shut down, but there will be India or Latin America. When you straddle OEM and retail, and do it globally, you have the opportunity to start optimizing.”
Unless, that is, your competitors start flooding the market with product, and sinking prices. If that happens, it’s back to the roller coaster again. (AAPL)
Saturday, 20 February 2010
HP's Mark Hurd: The Biggest Winner
Wall Street didn't make much of HP's services numbers – but they're actually pretty good. Photo: HP.
Just for a moment, forget about revenue and earnings per share. The most interesting number out of Hewlett-Packard’s earnings announcement this week was this:
15.8%.
That’s the profit margin CEO Mark Hurd and his team squeezed out of HP’s (HPQ) services business on the way to an impressive first fiscal quarter. The significance of the number? When Hurd bought lumbering services giant EDS for $13.9 billion a year and a half ago, he embarked on the corporate equivalent of that weight-loss show, The Biggest Loser. For HP to win, the former EDS has to drop weight. And the surest sign of weight loss is healthy margins. More
Tags: EDS, Financials, HP, IBM, Mark Hurd, Services
Just for a moment, forget about revenue and earnings per share. The most interesting number out of Hewlett-Packard’s earnings announcement this week was this:
15.8%.
That’s the profit margin CEO Mark Hurd and his team squeezed out of HP’s (HPQ) services business on the way to an impressive first fiscal quarter. The significance of the number? When Hurd bought lumbering services giant EDS for $13.9 billion a year and a half ago, he embarked on the corporate equivalent of that weight-loss show, The Biggest Loser. For HP to win, the former EDS has to drop weight. And the surest sign of weight loss is healthy margins. More
Tags: EDS, Financials, HP, IBM, Mark Hurd, Services
Are you a tax cheat?
Do you cheat on your taxes? If so, you're not alone. More Americans are fudging their taxes and an increasing number of people are scared of being audited, a survey from the IRS Oversight Board shows.
Thirteen percent of those surveyed said cheating is acceptable, according to an annual poll conducted for the Internal Revenue Service Oversight Board. That's up 4% from 2008. Four percent of Americans said they cheat on their taxes "as much as possible," up 1% from the year before.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
Quick Vote
Do you cheat on your taxes?
Not at allA little here and thereAs much as possible or View resultsAs tax season approaches this year, even more people may resort to cheating.
"I think the temptation will be greater this year, given the overall economic environment," said Bob Kerr, senior director of government relations at the National Association of Enrolled Agents.
But it's still impressive that more than 80% of those surveyed said they don't think it's ever acceptable to cheat, said Kerr.
How people cheat: As the government offers more refundable credits to taxpayers, such as the Making Work Pay Tax Credit, people may be tempted to try to claim more money than they deserve.
"We're getting more refundable credits," said Mark Luscombe, a tax analyst at CCH. "Historically, when you're able to get a check from the government in your hands right away, this has brought more cheaters out of the woodwork."
Besides common cheating tactics such as inflating the value of charitable donations and claiming personal expenses as business expenses if you're self-employed, Luscombe said a number of "cheaters" are simply those people who can't decipher the complicated tax code.
"People can't figure it out so they just put down a number that seems pretty good to them," he said. "The laws get more and more complicated each year and people just have less time to figure out the right way to do it so they might try to cut some corners."
Scared of getting audited: When asked if the fear of an audit plays a role in whether or not a taxpayer reports his or her taxes "honestly," 77% of Americans said yes, according to the poll.
That shouldn't be a surprise given the higher likelihood that you will be selected for a review. Last year, the number of audits rose to the highest level in a decade, and even more audits are expected this year as the Obama Administration pours money into tax enforcement.
A hotline was created to prevent cheaters from slipping past the IRS. Anyone with information about suspected tax fraud is encouraged to report it to the agency's tip line at 1-800-829-0433.
"There's still only about a 1% chance on average that you will be audited," said Luscombe. "But the audit rate has headed back up in the last couple years so your chances are certainly going up."
Thirteen percent of those surveyed said cheating is acceptable, according to an annual poll conducted for the Internal Revenue Service Oversight Board. That's up 4% from 2008. Four percent of Americans said they cheat on their taxes "as much as possible," up 1% from the year before.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
Quick Vote
Do you cheat on your taxes?
Not at allA little here and thereAs much as possible or View resultsAs tax season approaches this year, even more people may resort to cheating.
"I think the temptation will be greater this year, given the overall economic environment," said Bob Kerr, senior director of government relations at the National Association of Enrolled Agents.
But it's still impressive that more than 80% of those surveyed said they don't think it's ever acceptable to cheat, said Kerr.
How people cheat: As the government offers more refundable credits to taxpayers, such as the Making Work Pay Tax Credit, people may be tempted to try to claim more money than they deserve.
"We're getting more refundable credits," said Mark Luscombe, a tax analyst at CCH. "Historically, when you're able to get a check from the government in your hands right away, this has brought more cheaters out of the woodwork."
Besides common cheating tactics such as inflating the value of charitable donations and claiming personal expenses as business expenses if you're self-employed, Luscombe said a number of "cheaters" are simply those people who can't decipher the complicated tax code.
"People can't figure it out so they just put down a number that seems pretty good to them," he said. "The laws get more and more complicated each year and people just have less time to figure out the right way to do it so they might try to cut some corners."
Scared of getting audited: When asked if the fear of an audit plays a role in whether or not a taxpayer reports his or her taxes "honestly," 77% of Americans said yes, according to the poll.
That shouldn't be a surprise given the higher likelihood that you will be selected for a review. Last year, the number of audits rose to the highest level in a decade, and even more audits are expected this year as the Obama Administration pours money into tax enforcement.
A hotline was created to prevent cheaters from slipping past the IRS. Anyone with information about suspected tax fraud is encouraged to report it to the agency's tip line at 1-800-829-0433.
"There's still only about a 1% chance on average that you will be audited," said Luscombe. "But the audit rate has headed back up in the last couple years so your chances are certainly going up."
How can I boost body mass index without adding fat?
1. Choose healthy carbohydrates such as whole grain cereal, bread, brown rice, or beans at each meal or snack. Try to limit sugary and highly processed foods.
2. Add good fats including nuts and seeds, olive and canola oil, and avocado to snacks, meals and recipes whenever possible.
3. Don't fill up on vegetables at meals as they may prevent you from eating more energy-dense foods. Cooking vegetables in olive oil or healthy oil-based sauces can help increase the calorie density of vegetables servings. Fruits are also filled with nutrients and have more calories so if you get full easily, eat more fruits than vegetables. Dried fruits are even more calorie dense, so try to include them in meals and snacks throughout the day.
4. Make sure to add resistance training to your exercise regimen so you gain muscle in addition to body fat. This may help increase your appetite too.
5. If you find that water fills you up, limit consumption at meals. Try drinking 100 percent juice or 1 percent milk with meals and drink water between meals.
To increase hemoglobin, you need to increase your intake of iron. Iron is best absorbed in animal foods such as red meat, seafood and chicken, so try to eat these foods on a regular basis. If you are a vegetarian, make sure that you eat plant-based iron sources with a vitamin C-rich food such as oranges or orange juice, grapefruits or grapefruit juice, strawberries, kiwi and green pepper to increase the absorption of iron. If you take an iron supplement, do not take it with coffee, tea, or milk, as this may negativately affect absorption. Here are several iron-containing foods you should try to include in your diet on a regular basis: Swiss chard, beans, lentils, iron-fortified cereal, enriched grains (bread, pasta, rice) soybeans, spinach and dried fruit.
2. Add good fats including nuts and seeds, olive and canola oil, and avocado to snacks, meals and recipes whenever possible.
3. Don't fill up on vegetables at meals as they may prevent you from eating more energy-dense foods. Cooking vegetables in olive oil or healthy oil-based sauces can help increase the calorie density of vegetables servings. Fruits are also filled with nutrients and have more calories so if you get full easily, eat more fruits than vegetables. Dried fruits are even more calorie dense, so try to include them in meals and snacks throughout the day.
4. Make sure to add resistance training to your exercise regimen so you gain muscle in addition to body fat. This may help increase your appetite too.
5. If you find that water fills you up, limit consumption at meals. Try drinking 100 percent juice or 1 percent milk with meals and drink water between meals.
To increase hemoglobin, you need to increase your intake of iron. Iron is best absorbed in animal foods such as red meat, seafood and chicken, so try to eat these foods on a regular basis. If you are a vegetarian, make sure that you eat plant-based iron sources with a vitamin C-rich food such as oranges or orange juice, grapefruits or grapefruit juice, strawberries, kiwi and green pepper to increase the absorption of iron. If you take an iron supplement, do not take it with coffee, tea, or milk, as this may negativately affect absorption. Here are several iron-containing foods you should try to include in your diet on a regular basis: Swiss chard, beans, lentils, iron-fortified cereal, enriched grains (bread, pasta, rice) soybeans, spinach and dried fruit.