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
Fool contributor Anders Bylund holds no position in any of the companies discussed here. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.