Editor's note: This story was part of TheStreet's 10-part Top Business Leaders of Tomorrow series.
NEW YORK (
) -- Gadget geeks may take for granted the flash memory that underlies today's instantaneous access to digital content, but at the heart of today's consumer friendly technology is flash memory global king
, and its senior vice president and head of retail operations, Shuki Nir.
Nir didn't exactly travel a straight road from tech-obsessed kid to technology executive. Nir wasn't in his garage or basement like a young Steve Jobs or Bill Gates creating protean personal computing machines while fighting acne -- though he does fondly recall when his parents purchased him an
and days spent during his Israeli youth playing
. "That was important to me, and it shows how in technology we influence lives the way my life was influenced by a video game," Nir says.
Shuki Nir, head of retail business at SanDisk
Even if Nir wasn't a tech whiz kid soldering spare parts in his spare time, he was working with his hands at an early age growing things, and showing the kind of determination that can be linked to his rise through the ranks of California's technology inner circle. Nir's early work experience even involves the purchase of some very old-school consumer technology.
One of Nir's first jobs as a teenager was working in the fields farming cauliflower. "I wanted to buy a cassette recorder, so I collected cauliflower. It was a hard job, out in field growing cauliflower, but we were lucky. We made more money than we needed. It's still my strangest job to date."
Nir would have more typical jobs during the early days of his professional career. He started in accounting and completed an MBA in finance at Tel Aviv University, and worked for Deloitte in Israel. Nir took his first stab at a Silicon Valley career when he was working for Deloitte in New York and was given seed money to develop a technology startup. This first tech venture didn't go as well as the cauliflower farming venture, though. After it was shut down, Nir joined Israeli flash memory company
. M Systems was acquired by SanDisk in 2006, and Nir began his focus on the retail business for the flash memory global leader.
Nir's philosophy for technology business success is pretty simple: enjoy your job, build relationships all over the world, and separate the wheat from the chaff, so to speak, in the same way an Israeli kid might discard the cauliflower ears wilted by the desert heat. "You have to enjoy what you are doing, or you can't excel, and as the world becomes smaller and smaller, the ability to interact with other cultures will go a long way. Most important, maybe, is not knowing what to do but what
to do," Nir says.
Yet the SanDisk story is a lot more complicated, with the legacy business of selling flash cards for products like point-and-shoot cameras being supplanted -- and not just by advanced DSL camera technology, but by the surge of hand-held gadgets that do just about everything, from mobile phones to tablet PCs.
Low-end cameras are in decline because consumers are using smart phones to take photos. Every single time there is trend toward mobile, it opens an opportunity for SanDisk flash cards, Nir notes. Innovate in whichever market is asking for innovation is the key. "I'm not an engineer, but I've had good teachers at SanDisk. Technology is about embracing change, one can't succeed without that fundamental philosophy," Nir says.
Nir argues that imaging is still a growth market at the high end, too, even if point-and-shoot cameras are in decline -- and anyone who doubts the innovative use of flash for cameras might want to compare their cell phone shots of their Friday night out on the town to the
photography section of the SanDisk web site (http://www.sandisk.com/about-sandisk/sandisk-extreme-team).
In any event, as the last decade's primary use of flash is again experiencing a revolution, Nir pointed to tablet PCs as a growing market where an intrinsic part of what is offered by the product to the consumer is flash memory-based. If flash memory itself is a commodity where SanDisk is king, and tablet PCs and mobile phones are the future, it's worth noting that the flash king has already carved out a niche for itself in the MP3 player market. There's a big market for MP3 consumers who aren't among the tech elite who snub their nose at any gadget that doesn't feature Jobs' ubiquitous fruit icon.
"Apple is the dominant force in the MP3 space, but the market opportunity in MP3 has grown tremendously over the past few years, and we are in the value player market," Nir explains. SanDisk's Sansa lineup of MP3 players controls 32% of the below-$100 MP3 player market.
The SanDisk embrace of change isn't just about its flash memory chasing down new products in which to embed itself, but becoming a technology king in the world's most explosive consumer markets, too. As Nir's profile has grown at SanDisk, and the profile of the products in which flash memory revenue is accelerating changes, so are the markets in which Nir and SanDisk hope to become a go-to technology brand.
The commoditization of the core flash-memory market leaves SanDisk with something to prove to the Street, even if its leading global market share position remains a consistent statistic. Half of the 20 analysts who cover SanDisk rate the stock a buy, and only two analysts have signaled a sell on shares of SanDisk, but eight analysts have the flash memory king at a hold. There has even been recent chatter in the Israeli press that, frustrated with its market valuation relative to its technology opportunity, SanDisk might consider going private again.
SanDisk's shares have recovered mightily since the lows of 2008 and 2009, when they were near an all-time low. SanDisk shares have recently reached what seems to be at least a short-term plateau, between $35 and $40, though shares were near the $50 mark as recently as June.
SanDisk answered some of its critics on Thursday, trouncing earnings consensus and rewarding its bullish friends on the street. SanDisk reported earning of $1.30 per share, well ahead of the street, which was only looking for $1.05 earnings per share from SanDisk. SanDisk also outperformed on gross margin, and its shares were rallying by more than 7% early in Thursday's after market session. SanDisk revenue was in line with the Street.
Leaving aside the ups and down in market sentiment and the rumors in the Israeli press, Nir is focused on the present. One of Nir's biggest tasks as head of retail at SanDisk has been to build its presence in the BRIC countries (Brazil, Russia, India and China). In the last two years, SanDisk has significantly increased its investment in the BRIC countries, and it's not just about the emerging markets but the explosive use of consumer gadgets within the world's growth economies.
"The BRIC opportunity is very exciting for me," notes Nir. "Statistically, the growth of mobile phones in these countries is amazing. In India, we found out that the mobile phone is becoming like a computer for many consumers -- and for us, being the one who created the micro card for mobile phones, it's amazing to see how many people are using it." Nir adds a note of simple brand awareness math: "If you buy a mobile phone and its branded with a SanDisk card, there's a chance that the next card the retail consumer buys will be SanDisk as well."
Nir's retail approach in the BRIC nations is focused on decentralized operations.To recreate in the BRIC nations what SanDisk has done in its largest core markets, teams in the BRIC countries are addressing the local needs of consumers while bringing in the entire SanDisk product line. Consumers in these countries are starting to be exposed to everything SanDisk delivers in the U.S. and Western Europe. In an effort to take SanDisk's global brand all over the world, local teams have to drive the effort and fine-tune it for the local market.
Nir says that with 3G networks coming online in India and China, and the U.S. moving to 4G, consumers will want to access more content and data, and video content, in particular, will drive even more demand for flash. "The consumer of mobile technology is moving in the right direction for us," Nir says.
-- Written by Eric Rosenbaum from New York.
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