Lexar just broke the bank

For you industry afficionados:

Lexar expects net loss of $34-$38 million

Lexar had been expected to post net income of roughly $1 million for the fourth quarter of 2004. The cause of the loss is attributed to unexpectedly intense price wars in flash memory while component prices (Lexar's costs) remained steady. Samsung (Lexar's supplier) is making a killing.

WR Hambrecht & Co. Investor Analyst:
"Lexar looks to us like a broken business model"

Flash memory is definitely a buyer's market. Grab your $50AR 1GB SD cards quick, 'cuz the company selling them is committing suicide! Actually this is probably just a really (really) rough patch in the bust part of their business cycle. Lexar isn't going anywhere; I figure they would have managed to maintain their market share vis-a-vis Sandisk etc.

Either Lexar is being run by loonies or they are facing seriously difficult market conditions. We'll have to see how Sandisk turns out (they are reporting earnings in less than an hour, as a matter of fact...), but they will probably fare better.

[Frenchy]

Just bought one 32X today. Thanks for the tip :approve:

It's official. Sandisk just screwed over Lexar.

Sandisk's 4th Q earnings report

[aximnut]

What did they do with all the money they gained when they were the only company besides Sony making memory sticks? They were cheaper than Sony so they sold a ton of cards.

They seem to have spent most of their resources developing a dozen different thumbdrive lines and recently they've been experimenting with new formats (USB card: USB-plug-as-thumbdrive) and mp3 players (two new ones on the market, two more on the way--three of these have SD slots). The only good thing I see them accomplishing is keeping some market share due to their unsustainable price cuts. Lexar's mp3 players are not getting much love and there is way too much competition in the flash memory market these days anyway, esp. with ATP finally showing up.

[axzilla]

sandisk is kicking arse we can thank them for low memory prices right now

[CBombC]

Nice!
1GB Lexar at ecost.com for $58 right now.
Other good deals in bargain countdown too.

[[Jett]-CRX]

Haha... I bought mine less than a month ago and the best price I found (without the hassle of rebates) was $70 at Sam's... and they go down $12 in a month.