Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Bruce Aronow who wrote (2566)	6/6/1996 11:50:00 PM
From: Fernando J. Pineda	of 58324

How many disks? A while ago Ken Marcus posted an article (see #1517) written by William Terdoslavich entitled "The media is the message" in "Computer Reseller News" in which Michael Collins, director of channel marketing for IOMEGA makes the following statements: "[The user]...buys an average of 5 to 6 disks with the drive...Then 64% of the people purchase more media in the first eight weeks of owning the drive...They buy another six disks..." Of that protion three fifths of those repeat buyers purchse their disks within four weeks of buying the drive. If we believe these statements (allegedly based on market studies), then we have the following picture: 1) On average 5-6 disks are purchased at the same time as the disk 2) On average 0.646=3.84 more disks are purchased within 2 months. Of these (3/5)3.84=2.3 disks are purchased in the first month and (2/5)*3.84=1.53 disks are purchased in the second month. 3) So, in the first month we have, on average 7.3-8.3 disks purchased and in the second month we have 1.53 disks purchased. The total number of disks purchased in the first 2 months is thus 8.8-9.8 disks. Terdoslavich (in the same article) states that 1 million disks have been sold and that 10 million disks have been sold (Published in early May). I crunched some numbers and couldn't get a 10:1 tie ratio to agree with the estimated unit sales of zip drives and the officially stated revenue (<167M) from zip products (which I assume includes disks). To get the unit sales and the the stated revenues to agree I had to use a tie ratio closer to 4 disks per drive. What does this mean? If I believe the statements in the article then the only explanation that I come up with is that many of the drives produced in the first quarter are going to OEM's. Thus there is a delay of a few months before they start to generate disk sales. This makes the apparent tie-ratio smaller. The revenue per drive also has to be smaller to get the numbers to work out. Interestingly enough, I find that I have to get the revenue per drive down to nearly $100 before I can get <$167M zip revenue. Even with these low figures, however, I still get about $1.1B in zip sales alone for FY96. I expect future up-side surprises to come from the delayed tie-ratio as drives sold to OEM's are put in the hands of consumers.

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