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 (Nasdaq: SNDK), anyway. SanDisk made a GAAP net profit of $2.01 per share on 35% higher sales year-over-year. SanDisk proved that 2010 was a very good year, as large helpings of its flash memory were almost mandatory components of many smartphones. Management sees continued strength in 2011 with a healthy supply-and-demand balance across the flash industry and "robust" growth as smartphones and tablets continue to mature.

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 (Nasdaq: MU), for example, saw margins and sales take a similar dip on a rolling basis, but they remain at healthy levels. The same is true for hard drive maker Seagate Technologies (Nasdaq: STX), while storage components designer Xyratex (Nasdaq: XRTX) is still seeing rolling improvements in these areas. This all supports the theory that computer hardware could be cooling down from its extreme rebound days, but it's far from a wholesale collapse.

So stick SanDisk's report in your back pocket, add the stock to your watchlist, and have another look at hardware stocks, reassured that the sky isn't about to fall on them.