Question-and-Answer Session
Operator
(Operator Instructions) And we’ll take our first question from Gary Hsueh with Oppenheimer.
Gary Hsueh - Oppenheimer
Thanks for taking my question. I just have a quick question here about your ability to be more disciplined in terms of pricing and walking way from lower gross margin business -- why is that trend in terms of your guidance really not continuing or extending into the September/December quarters? And what was particular in the June quarter that basically instigated this?
Judy Bruner
Well, I wouldn’t say that it’s not continuing. I’m not sure what you are pointing to in my remarks. We will continue to be targeting profitable market share. I did indicate that our expectation for the industry is that pricing will be stable to modestly down in the second half. We forecast this in part because in recent times, capacity has come back online for the industry and so we expect there is somewhat higher bp growth in the second half than in the first half of 2009 and that that may impact industry pricing in the second half.
I have not given a specific pricing forecast for SanDisk for the second half but we are very focused on targeting profitable market share.
Gary Hsueh - Oppenheimer
Okay, great and just one quick follow-up here if I may, just on the growth in the mobile business -- I was wondering if you guys could basically help explain your market share on bundled microSD or SD cards in general that come with mobile phones? And also your market share on the embedded flash applications, particularly smartphones and how you segue from basically a more bundled approach to now I think increasingly a more kind of embedded smartphone approach in terms of that business.
Eli Harari
Okay, so on the bundled cards, of course this is a very big part of our mobile business. Both the microSD as well as the M2, which is the equivalent of microSD for Sony Ericsson phones -- I believe that we are the largest supplier of bundled cards to the top 10 handset vendors. Of course, Apple doesn’t have a card slot so -- but other than that, I believe every other major handset vendor supports microSD and are a customer of ours.
I would say that with the -- the one impact of the higher prices that we have seen in the last four or five months, the impact in the OEM space has been that the bundled cards are trending to lower densities, lower capacities -- in other words, the OEMs have a certain budget for cards and if the price goes up, they just reduce the capacity. And in fact if you take a look at the market today, there’s tremendous shortages of 1-gigabyte microSD because business that used to be 2-gigabyte is going to one because of that pricing.
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