Industry's Benchmark in Retail Channel Dynamics

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Industry's Benchmark in Retail Channel Dynamics

  1. 1. Retail Channel Dynamics of Flash Memory Products PriceG2, Inc. Andy Higginbotham Santa Clara, CA USA August 2009 www.PriceG2.com 1
  2. 2. Agenda  Introduction  Channel Pricing: Mechanics, Erosion, Premiums  High Capacity Introductions  SSDs in Retail  $/GB Charts  Conclusion Santa Clara, CA USA August 2009 www.PriceG2.com 2
  3. 3. Introduction  PriceG2, Inc. is a technology leveraged market research firm • Products: Research Reports, Analysis Software  Product Categories • Flash Memory – SSD, USB Flash Drives, Secure Digital, Memory Stick, CompactFlash, MMC, xD • Hard Drives – 1.0”/1.8”/2.5”/3.5”, Internal/External, SATA/PATA/SAS/FC, RPM, etc. • (more to follow) Santa Clara, CA USA August 2009 www.PriceG2.com 3
  4. 4. Data Transformed into Information  PriceG2 tracks retailers products over the internet  Standard metric: s/w runs the same way every week  Thousands of data points transformed into reports & s/w Retailers Best Buy CDW Circuit City1 Reports Internet CompUSA 01001000 Frys 01000101 01001100 Information Office Depot 01001100 01001111 OfficeMax Staples “Technology” Analysis Software Target Walmart Santa Clara, CA USA August 2009 note 1) before Circuit City ownership change in 2009 www.PriceG2.com 4
  5. 5. Channel Pricing Mechanics  Retail Price$ is fn(cost, GM requirements, retailer goals, etc.) GM$ COGS Retail Price Cost from Supplier “On-Line” Retailer $100 •Small or no inventory •No retail buildings $90 Price •No store employees $80 =Smaller GM needed GM $70 “Bricks and Mortar” Retailer Cost $60 •Physical Inventory $50 •Retail Buildings $40 •Store Employees time =Larger GM needed Santa Clara, CA USA August 2009 www.PriceG2.com 5
  6. 6. Retail Pricing of USB Flash Drives Trends  Price $ Erosion followed by Price % Erosion  Technological maturity + multiple sources of supply (competition) = pricing falls towards an asymptote USB Thumbdrives, Lowest Weekly Retail Price Found USB Flash Drives, $180 CY2007 CY2008 1H2009 $160 $140 8GB $120 Price $ Erosion ~$100 (-60%) $100 $80 $60 Price % Erosion ~ -76% $40 4GB $20 $0 Santa Clara, CA USA August 2009 www.PriceG2.com 6
  7. 7. Pricing Premium: “A Rose By Any Other Name” “4GB memory card = 4GB memory card, right? Why should pricing be different?” 4GB Weekly Flash Card Pricing, CY2008 $60.00 SD MS CF $50.00 $40.00 $30.00 $20.00 $10.00 $0.00 Q1 Q2 Q3 Q4  SD had lowest average pricing over 52 weeks Santa Clara, CA  USA CF, MS were priced 1.4X, 3.1X AVG. higher, respectively August 2009 www.PriceG2.com 7
  8. 8. Velocity of High Capacity Introductions  How fast is the industry increasing capacity, really?  Volumetric Storage: fixed mm3 = demand on technology to increase capacity • Flash Cards – must fit a slot bounded by x-y-z coordinates y mm x mm Flash Card z mm  Retail Price Limited Storage Price $, not volume (mm3) is #1 constraint It costs what • USB Flash Drives ??? • SSD – “sort of” = Demand on technology to reduce $  Underlying advances of flash memory cell density Santa Clara, CA USA August 2009 www.PriceG2.com 8
  9. 9. Detection of New High Capacities  PriceG2 software monitors weekly product listings at major retailers • Description, Price, Model #, Availability* (number of days wait to ship)  Alarms go off when a new capacity model appears, clients notified Santa Clara, CA USA August 2009 *Note: not all retailers list availability www.PriceG2.com 9
  10. 10. New High Capacities in CY2007 - 2009  “Volumetric” Flash Card GB Increases • 2007 – 2008: Doubling – CF : 16 to 32GB in 11 months 64 Highest Capacity Flash Cards Available (GB) SD MS CF – SD : 16 to 32GB in 8 months CF: doubled inSD: doubled in 11 months • 2008 – 1H2009: Flat! 8 months – SD: 12 months, no increase yet 32 – CF: 16 months, “ “ – MS: 16 months, “ “ 16 8 CY2007 CY2008 1H2009 Santa Clara, CA USA August 2009 www.PriceG2.com 10
  11. 11. Retail SSDs: What is out there? Week 27, 2009 27 Suppliers FUSION-IO TEXAS MEM 320/640GB OCZ $14,479/ KINGSTON 450GB KINGSTON 250GB $15,704 $9849 CRUCIAL 64GB 128GB $659.99 OCZ 32GB $239.99 $139.99 16GB $79.99 $44.99 Santa Clara, CA USA August 2009 www.PriceG2.com 11
  12. 12. 27 SSD Suppliers: Where are They Found?  “Center of Gravity” - technical retailers CDW, CompUSA, Frys  Surprises: Best Buy (more?), Walmart (early adopter) Week 27, 2009 # of SSD Suppliers Listed at each Retailer 20 18 18 16 14 12 10 11 8 6 4 5 3 2 1 1 2 0 1 0 Best Buy Office Frys CDW CompUSA Walmart Staples OfficeMax Target Depot www.PriceG2.com
  13. 13. Retail SSD Distribution Map, WK27 Legend: Low GB - High GB Supplier/Retailer Best Buy CDW CompUSA Frys Office Depot OfficeMax Staples Target Walmart ACTIVE MEDIA 16 ALURATEK 32-64 CAVALRY 64-128 •Empty Cells  Opportunity CENTON 32-192 CORSAIR 64-256 •15 of 27 suppliers with 128GB+ CRUCIAL FUSION-IO 32-64 80-640 32-64 64 • 7 of 27 suppliers with 250GB+ HP 32-64 IBM 15.8-31.4 IMATION 16-128 32-128 16-64 INTEL 4-160 32-160 80 ITRONIX 32-64 KINGSTON 32-160 80 64-160 LENOVO 128-256 LEXAR 4-8 8-16 16 OCZ 16-250 30 PANASONIC 32 PATRIOT 32-256 32-256 PNY 64-128 RIDATA 16-128 SAMSUNG 256 SANDISK 8-32 SUN 18-100 TEXAS MEM 450 TOTAL MICRO 32 TRANSCEND .128-192 2-64 8-192 8-128 WINTEC 24-48 Santa Clara, 27 USA CA August 2009 www.PriceG2.com 3 13 # of Suppliers 1 18 11 5 1 1 2 0
  14. 14. $/GB Charts for Week 26, 2009  $1.25/GB is the low found in 16GB USB Flash Drives  1 year ago price was $3.75/GB for 16GB USB Flash Drives $8.50 $7.50 $9.00 $8.00 $8.00 $7.00 $6.50 $6.23 $7.00 $6.00 $5.00 $6.00 $5.00 $4.37 $4.56 $5.00 $4.00 $3.99 $3.12 $3.49 $4.00 $3.48 $3.00 $2.34 $2.66 $1.87 $1.95 $3.00 $2.50 $2.00 $2.50 $2.50 $1.87 $1.87 $1.25 $1.50 $2.00 $2.00 $2.34 $1.00 $1.75 $1.00 $0.00 SSD MS 8 $0.00 16 USB CF 32 64 2 128 4 SD 256 8 16 32 USB SSD SD CF MS Santa Clara, CA USA August 2009 www.PriceG2.com 14
  15. 15. Conclusions  Pricing • Erosion – up to 60~70% per year from 2007 – 1H2009 • Some flash cards get a premium of up to 3X more for same GB  High Capacity Introductions • Doubled in 2007 – 2008. Where are they in 2009?  SSD • Retail U.S. category emerged in 2007, now has 27 suppliers • Trend to watch: make lower cost xxGB vs. make highest capacity  $/GB • $1.25/GB is the lowest retail price detected for WK26-2009 for 16GB USB = Approx. 2/3 price erosion from the same week a year ago Santa Clara, CA USA August 2009 www.PriceG2.com 15
  16. 16. Thank You andy@PriceG2.com Santa Clara, CA USA August 2009 www.PriceG2.com 16

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