Like with death and taxes, there are two inalienable truths in investing: hardware businesses earn thin margins and software businesses earn fat ones, because making physical things is costly while selling code that can be copied endlessly is, comparatively speaking, not.
Every so often, though, a company scrambles that neat distinction, and few are doing it more clearly than Sandisk Corporation (NASDAQ: SNDK). The maker of physical flash memory chips recently posted margin numbers that look almost too good for its industry.
