While flash memory is effectively a commodity product, continuing shortages should keep fueling SanDisk's growth in the coming quarters. However, the company has other advantages over competitors as well. In 2009, SanDisk collected 12% of its revenue on royalty payments from competitors licensing its technology. While these payments should decrease in coming years, the royalties give SanDisk a cushion of high margin revenue even if memory prices dip back in coming years.
Still, the good times can't stay this good forever. SanDisk actually saw the price of its memory sequentially rise in a recent quarter, a thought normally unheard of in a computer industry where prices are constantly on an aggressive downward march. However, SanDisk finds itself at the forefront of two very attractive growth areas. As mobile and SSD growth continues forging ahead, the company is the best pure-play on either trend.