"Buy low and sell high" is obviously a winning combination for investors skilled enough to do so on a regular basis. But there's an equally difficult combination in the manufacturing world: selling products into higher-end and lower-end markets simultaneously. That's precisely what SanDisk (NASDAQ:SNDK) intends to do with its newest MP3 players.

Yesterday, the company unveiled a new, higher-end MP3 player, the Sansa e280, with eight gigabytes of flash memory storage -- enough for roughly 2,000 songs. SanDisk also reported that it's working on an MP3 player that will cost less than $100.

The Sansa e280 will be priced at $249.99, a price point meant to compete directly with Apple's (NASDAQ:AAPL) iPod nano. The lower-cost player will target new users at the lower end of the consumer market.

It's a good strategy, and it should allow SanDisk to further increase its percentage of total MP3 player sales, which have jumped from 3.1% to 9.7% in the past year. This still places SanDisk well behind Apple, but it has allowed the company to leapfrog into the No. 2 position, past Creative Technology and Samsung.

More significantly, however, I think SanDisk's announcement poses a danger to Apple. To date, its increase in market share has not come at Apple's expense -- the company had 75% of the market share for MP3 players in 2005, and has the same amount today. But that could be about to change.

SanDisk's latest efforts could erode Apple's lead on two fronts. By offering twice as much memory at the same price, the Sansa e280 should compare quite favorably to the 4GB iPod nano. This could cause a number of customers looking to upgrade to switch to SanDisk. Secondly, the lower-end $100 version (which will probably also possess more memory than Apple's popular, low-cost iPod Shuffle) could weaken Apple's ability to reach new and younger customers. Often, these new consumers are most easily converted into higher-end customers as they age and mature.

In addition to these two possibilities, the threat of a price war could also erode Apple's margins. If that happens, SanDisk is better-positioned for such a battle. Flash memory is the most expensive cost of an MP3 player, and Apple must rely on Intel (Nasdaq; INTC), Micron (NYSE:MU), and Toshiba for its flash chips. But SanDisk produces the flash memory itself, letting it cut out the middleman and pass the savings directly on to the consumer.

All told, I like SanDisk's move; it could give the company's beleaguered stock a boost by moving SanDisk more aggressively into the higher-margin market of MP3 players.

Think I'm wrong about the possible impact on Apple? So does Tim Beyers. You can read his arguments in "Apple Juices SanDisk."

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Fool contributor Jack Uldrich owns an iPod nano but does not own any stock in the companies mentioned in this article with the exception of Intel. The Fool has a strict disclosure policy.