industry's benchmark in retail channel dynamics
DESCRIPTION
TRANSCRIPT
www.PriceG2.com
Santa Clara, CA USA
August 2009 1
Retail Channel Dynamics of
Flash Memory Products
PriceG2, Inc.
Andy Higginbotham
www.PriceG2.com
Santa Clara, CA USA
August 2009 2
Agenda
Introduction
Channel Pricing: Mechanics, Erosion, Premiums
High Capacity Introductions
SSDs in Retail
$/GB Charts
Conclusion
www.PriceG2.com
Santa Clara, CA USA
August 2009 3
Introduction
PriceG2, Inc. is a technology leveraged market research firm• Products: Research Reports, Analysis Software
Product Categories
• Flash Memory
– SSD, USB Flash Drives, Secure Digital, Memory Stick, CompactFlash,
MMC, xD
• Hard Drives
– 1.0”/1.8”/2.5”/3.5”, Internal/External, SATA/PATA/SAS/FC, RPM, etc.
• (more to follow)
technology leveraged
www.PriceG2.com
Santa Clara, CA USA
August 2009 4
Data Transformed into Information
Information
Retailers
Internet
PriceG2 tracks retailers products over the internet Standard metric: s/w runs the same way every week
Thousands of data points transformed into reports & s/w
01001000
01000101
01001100
01001100
01001111
Reports
Analysis
Software
note 1) before Circuit City ownership change in 2009
“Technology”
Best Buy
CDW
Circuit City1
CompUSA
Frys
Office Depot
OfficeMax
Staples
Target
Walmart
www.PriceG2.com
Santa Clara, CA USA
August 2009 5
Channel Pricing Mechanics
Retail Price$ is fn(cost, GM requirements, retailer goals, etc.)
•Small or no inventory
•No retail buildings
•No store employees
=Smaller GM needed
“On-Line” Retailer
•Physical Inventory
•Retail Buildings
•Store Employees
=Larger GM needed
“Bricks and Mortar” Retailer
$40
$50
$60
$70
$80
$90
$100
GM$ COGS Retail Price Cost from Supplier
GM
Price
Cost
time
www.PriceG2.com
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
USB Thumbdrives, Lowest Weekly Retail Price Found
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
USB Thumbdrives, Lowest Weekly Retail Price Found
4GB
Santa Clara, CA USA
August 2009 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
CY2007 CY2008 1H2009
Price % Erosion ~ -76%
Price $ Erosion ~$100 (-60%)
8GB
CY2007 CY2008 1H2009
8GB
USB Flash Drives,
www.PriceG2.com
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
4GB Weekly Flash Card Pricing, CY2008
SD MS CF
Santa Clara, CA USA
August 2009 7
Pricing Premium: “A Rose By Any Other Name”
Q1 Q2 Q3 Q4
“4GB memory card = 4GB memory card,
right? Why should pricing be different?”
SD had lowest average pricing over 52 weeks
CF, MS were priced 1.4X, 3.1X AVG. higher, respectively
www.PriceG2.com
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
Retail Price Limited Storage
Price $, not volume (mm3) is #1 constraint
• USB Flash Drives
• SSD – “sort of”
= Demand on technology to reduce $
Underlying advances of flash memory cell density
x mm
y mm
z mm
Flash Card
Santa Clara, CA USA
August 2009 8
Velocity of High Capacity Introductions
It costs what
???
www.PriceG2.com
Santa Clara, CA USA
August 2009 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
*Note: not all retailers list availability
www.PriceG2.com
Santa Clara, CA USA
August 2009 10
New High Capacities in CY2007 - 2009
“Volumetric” Flash Card GB Increases• 2007 – 2008: Doubling
– CF : 16 to 32GB in 11 months
– SD : 16 to 32GB in 8 months
• 2008 – 1H2009: Flat!
– SD: 12 months, no increase yet
– CF: 16 months, “ “
– MS: 16 months, “ “
SD MS CF
CY2007 CY2008 1H2009
Highest Capacity Flash Cards Available (GB)
8
16
32
64
CF: doubled in
11 monthsSD: doubled in
8 months
www.PriceG2.com
Santa Clara, CA USA
August 2009 11
Retail SSDs: What is out there?
Week 27, 2009
OCZ
16GB
$44.99
CRUCIAL
32GB
$79.99
KINGSTON
64GB
$139.99
KINGSTON
128GB
$239.99
OCZ
250GB
$659.99
TEXAS
MEM
450GB
$15,704
FUSION-IO
320/640GB
$14,479/
$9849
27 Suppliers
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1 1
5
18
11
32
1 00
2
4
6
8
10
12
14
16
18
20
Best Buy Office Depot
Frys CDW CompUSA Walmart Staples OfficeMax Target
# of SSD Suppliers Listed at each Retailer
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
www.PriceG2.com
Santa Clara, CA USA
August 2009 13
Retail SSD Distribution Map, WK27
Supplier/Retailer Best Buy CDW CompUSA Frys Office Depot OfficeMax Staples Target Walmart
ACTIVE MEDIA 16
ALURATEK 32-64
CAVALRY 64-128
CENTON 32-192
CORSAIR 64-256
CRUCIAL 32-64 32-64 64
FUSION-IO 80-640
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
27
# of Suppliers 1 18 11 5 1 1 2 0 3
Legend: Low GB - High GB
•Empty Cells Opportunity
•15 of 27 suppliers with 128GB+
• 7 of 27 suppliers with 250GB+
www.PriceG2.com
USB
SSD$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
816
3264
128256
$1.87
$1.25 $1.50$1.87
$3.49
$7.50
$5.00
$3.12
$2.34
$1.95
$2.66
USB SSD
SD
CF
MS
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
24
816
32
$3.48
$2.50
$2.00
$1.75$2.34
$6.50
$3.99
$1.87$2.50
$2.50
$8.50
$6.23
$4.37 $4.56
SD CF MS
Santa Clara, CA USA
August 2009 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
www.PriceG2.com
Santa Clara, CA USA
August 2009 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
