SanDisk’s commercial channel
SanDisk classifies its revenues into commercial and retail channels. SanDisk’s commercial channel encompasses sales that distributors make directly to original equipment manufacturers (or OEM), system integrators, and value-added resellers. The commercial channel comprises embedded flash solutions and both client and enterprise SSDs (solid state drives). This channel addresses a large variety of applications, including mobile phones, tablets, notebooks, gaming devices, enterprise storage solutions, servers, and other computing devices.
For the nine months ended FY14, SanDisk’s commercial channel contributed 67% to the overall revenues. In 3Q14, revenues from the commercial channel were strong, as the below chart highlights. Good client and enterprise class SSD sales also helped revenues. The company expects strategic acquisitions of Fusion-io Inc. and SMART Storage Systems to contribute significantly in the expansion of SanDisk’s offerings in the Enterprise SSD segment.
Intel (INTC), Micron Technologies (MU), Western Digital (WDC) and Samsung (SSNLF) are some of the leading client and enterprise SSD manufacturers. To find out more detail about client and enterprise SSDs, please read Record revenue growth for client SSDs stimulated SanDisk’s growth and Why enterprise SSDs are a key driver for SanDisk’s future growth.
SanDisk’s retail channel
SanDisk’s retail channel encompassed sale of products made directly and through distributors to consumer electronics stores, office superstores, photo retailers, and mobile phone stores. The retail channel comprises flash storage cards, sticks for smart phones, and digital cameras. This segment contributed approximately 33% towards overall revenues for the nine months ended FY14. Within the retail channel, sales of SD cards decreased due to the declining camera market. However, growth in demand for micro SD cards partially offset this decrease.