Is this the peak of the cycle for computer hardware companies?
That's one way to read the fourth-quarter results from memory maker SanDisk
So far, so great. But there's a darker side to this sunny report, too.
SanDisk's margins have been expanding steadily since the end of the last industry-crushing price wars, and sales have not only grown but accelerated. And this quarter put an end to both of those profit-friendly trends. Are the salad days about to end?
The short answer: probably not. The speedy recovery phase of this cycle may be over, but the market could -- and really should -- stay on a healthy plateau for some time. It doesn't hurt to have those tablet and smartphone markets supporting hardware demand for a while, as neither is anywhere near market-saturating maturity yet.
SanDisk CFO Judy Bruner posits that unit prices will decline in 2011, but at a healthy rate that encourages consumption of flash-equipped devices.
Related industries are showing similar signs. DRAM memory giant Micron Technology