Brian, IOMG management has a clear longterm vision and goals: Zip
and Jaz (and perhaps even Ditto) to become standard PC gears and
universal data storage media AROUND THE WORLD. Global
domination in the data storage business is the ultimate goal.
Huge recurring revenue and profits and great margin to be captured
from disks and tape sales. Drive sales will contribute to bottom line,
but will not be the main source of future profits.
To accomplish this mission, IOMG must deliver what the consumer
want, a superior product, at a price all world consumers and OEMs
can easily afford, at a retail price no competitors can afford, and
finally do all this at a pace that no one can catch up. Most of these
goals either have been accomplished or close to being accomplished.
However, potential competitions are still around and must be beaten
down before they have a chance to emerge.
As far as price reduction announcement can potentially hurt next quarter
revenue due to folks waiting for price cut before buying: I don't think
it will happen. Unlike your Compag example, demands for IOMG products
far outstrip supply and IOMG is having to "ration". The company is only
in its first phase of global domination and revenue growing at a dizzying
pace. When IOMG has gotten near its revenue plateau (as in the case
of Compag), a price reduction announcement would certainly have a
very negative effective. But in IOMG 's case, price reductions will have
very positive effects.
As far as I am concerned, even if revenure/profits slow down a little
for one or two quarters because consumers wait for price reduction,
So what? Won't change the longterm picture. But if you are a shortem
investor, them perhaps it's a reason for concerns. But it won't happen!
|
