SanDisk Unveils X300sSSD, Partners Wave Systems - Analyst Blog

Flash memory storage provider SanDisk Corp. SNDK recently unveiled its latest X300s SSD, thereby enhancing its solid state drive SSD portfolio. The newly-launched SSD will cater to the needs of emerging IT enterprises, secure data and enhance the performance of data centers and client computing devices.

The newest X300s SSD leverages Trusted Computing Group's (TCG) Opal 2.0 and Microsoft's MSFT hardware-based encryption to enhance overall drive capacity, reliability and performance. Moreover, the encryption is combined with a new SSD administration dashboard to support audit and regulatory compliance.

The X300s SSD comes in 64 gigabytes GB to 1 Terabytes (TB) capacities and will be available from June through SanDisk's Commercial Business Channel (CBC). We believe that with this new launch, SanDisk will strengthen its market position.

As per technology research firm Gartner, the total SSD market is projected to reach $19.4 billion in revenues in 2014, up from $9.2 billion in 2012. Gartner also said that SanDisk has the potential to secure 10.0-12.0% revenue share by 2014, up from 3.0-4.0% share at the end of 2012.

To further secure the newly-launched X300s SSD, SanDisk is providing Wave Systems WAVX Embassy Security Center ESC encryption software for free. The software offers a user and password set-up, which provides an extra layer of security for the enterprises using the SSD.   

Wave Systems offers simple, cost-effective solutions that protect the user at the hardware level, eliminating or reducing the need for software layers.  Wave Systems' cloud-based solutions will primarily help SanDisk to improve its offerings in segments such as fraud protection, endpoint security as well as threat intelligence services.

We believe that the Wave Systems partnership bodes well for SanDisk as it will enable the company to offer products with enhanced security level at a lower cost. This, in turn, will help SanDisk to emerge as a major player in the fast growing flash memory market, thus lending greater stability to its revenue stream.

Although lackluster PC sales and European headwinds remain concerns, the improving revenue stability boosts SanDisk's competitive position against the likes of Micron Technology Inc. MU. However, currency fluctuations could hurt fundamentals to some extent.

Nonetheless, we remain positive on management's commentary of a turnaround in the coming quarters and strong secular demand for its flash-based storage products.

Currently, SanDisk carries a Zacks Rank #2 (Buy).

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