Young,
Concerning post #3863 (we should all reference the post we are responding to,
there are too many to keep track of):
I agree whole heartedly with your analysis. Unless the retailers have been
lying, Zip is still selling very well and this rebate is NOT an effort
to boost flagging sales, but rather to accelerate already excellent sales.
The rebate also says to me:
1) Supply is not the problem it used to be. In fact, I read KE statement at
the recent press conference regarding supply to mean that Iomega is prepared
to meet whatever demand there is.
2) Iomega is upping the ante. Iomega was making money on $199 drives when
Syquest wasn't. Now Iomega will go to $149 and put further pressure on Syquest.
(I know, I know, Syquest dropped the price on the EZ to $119, but if they lost big
at $199, how can they possibly make money at $119....inventory liquidation)
This goes for the LS-120 also. It sells (will sell?) for over $200. Although
I am not positive, I doubt that Iomega will lose money on the rebate drive sales.
3) Cheaper price will gain consumer interest in Zips, which in turn puts pressure on
computer makers to include installed Zips (see #1) and then the vicious cycle starts.
This consumer interest will also result in BRAND NAME recognition for Iomega that
will help propel Jaz sales versus whichever competitor arises in that arena.
and more importantly, I believe that the rebate indicates:
4) KE and the Iomega bean counters have calculated that or see hard figures that
indicate that DISK revenues now exceed drive revenues and the momentum is such
that drive revenues now have or will soon have little impact on the overall
bottom line.
DISCLAIMER, this is all the opinion of one person.
Jay
LONG on IOMG |
