Growth of Tablet Market: Impact on SanDisk

SanDisk's (SNDK) stock has received a boost over the last year as smartphone makers like Research in Motion(RIMM) and Motorola(MOT) snap up the company's mobile flash memory cards. We estimate that SanDisk's mobile flash memory business accounts for 43% of the $50 Trefis price for SanDisk's stock.

Since the successful launch of Apple's iPad, tablet devices have been touted as a major new opportunity for SanDisk. Looking at the relative size of the mobile phone and tablet markets, we estimate that tablet memory sales could produce a modest upside of less than than 3% for SanDisk's stock. Our analysis follows below.

Apple leads the tablet race

Apple sold 3 million iPads within 80 days of its April 2010 launch, leading analysts to raise their 2010 iPad unit sales projections to more than 10 million in some cases. Other device manufacturers such as HP(HPQ), Asus, Sony and Acer are quickly developing their own tablet offerings to tap growing consumer interest in these devices.

IDC, a market research firm, estimates that annual tablet shipments will rise to around 46 million units by 2014. This obviously spells opportunity for chip makers such as Intel(INTC) and AMD(AMD), along with flash memory players like SanDisk.

SanDisk dominates the mobile phone memory market

About half of all mobile phones shipped worldwide in 2010 are expected to have flash-based memory, vs. 100% of all tablets. We estimate that SanDisk is currently responsible for 33% of the total gigabytes (GBs) of flash memory shipped annually for the global mobile phone market. We expect its share to reach 34% by the end of the Trefis forecast period.

You can drag the trendline in the chart below to create your own estimate for SanDisk's share of the mobile phone memory market, and see how it impacts the company's share value.

Global tablet shipments are expected to reach 46 million by 2014. In comparison to the size of the tablet market, we expect the global mobile phone market to grow from 1.2 billion units in 2009 to 1.8 billion units by the end of the Trefis forecast period.

Since SanDisk is the flash memory leader for mobile phones, we expect it to be the preferred vendor for tablet memory as well. You can modify our forecast for the global mobile phone market below to see how sales of 100 million tablets by the end of our forecast period (an

And you can see the complete $50 Trefis Price estimate for SanDisk's stock here.

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