SanDisk Will Eat Into Apple

Known in Australia as a memory card maker, Sandisk said they are about to become a major competitor to the iPod, with their new range of MP3 players.

SanDisk is the second largest manufacturer of MP3 players in the US, and Eric Bone, SanDisk’s director of consumer products marketing, said this is because customers get similar performance from their products for a lower price.

For example, the audio chip set is Portal Player, which Apple also uses, so the core building blocks are the same, Bone said

SanDisk is releasing a new range of players at the end of April, which it has dubbed “good, better and best”. These are the “good” Sansa m200 Series priced between $100 – $220 with capacities up to 2GB, the “better” c100 Series priced between $180- $240 with capacities of 1GB and 2Gb, and the “best” e200 Series priced between $280 – $450 with capacities up to 6GB.

Sandisk’s feature set is also greater than the iPod’s, and includes voice recording, FM tuner and the ability to support a greater number of music subscription services, and it’s aimed at an aggressive price point of at least $20 USD under the equivalent Apple product.

He also said that on a recent secret shopping trip to Harvey Norman staff had admitted to a high return rate on iPods: “Australians are blindly paying for Ipods, but my experience showed that a lot are being returned due to a problem with formats on pre-recorded libraries and, in particular, problems with WMA [Windows Media Audio].”

Bone said that SanDisk is aiming to target the large portion of the market that is not yet hooked to iTunes, and who are concerned about future switching costs related to moving away from Apple.

Josh Velling, Sandisk’s country manager for Australia and New Zealand, said the new range is in line with the company’s overall 2006 strategy to create products that “give value to a customer in a competitive way.”

The company first released its MP3 range at the end of 2004, and now considers phones and MP3 players as its key markets. Digital cameras make up about 50% of its business, the remainder comprising of memory cards, USB and gaming, Bone said.