To get a good perspective, read posts #1698 & 1699 by Ken Marcus
on transcripts of CNBC interview with KE in May. While reading the transcripts,
keep in mind how far IOMG have come along since only 2 months ago.
Follow are some statements by Kim Edwards that were most interesting to
me. Note the reference of 65-70 mils floppy drives sold a year and 80-90
mils hard drives sold a year (1995 estimates). This is the minimum potential
market size for Zip and Jaz, not counting new uses/applications such as
Acer 's $500 AcerBasic, Pippin @World, and audio/video market for Jaz.
Zip and Jaz sales so far, although extremely impressive by any standard,
are just a few drops in the bucket in the longterm plan. There are still much
work left to be done by IOMG to get to the longterm goals for Zip and Jaz.
And they will have to get very aggressive. More price cuts and other activities
will be coming. If they can pull it off, well... I hope we'll all hold our shares till then.
Think BIG and think longterm, folks!!!
Young
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DAVID FABER:
But there are very low margins on a commodity business I would
assume, so you do need fairly wide penetration rates. I mean, some
people say to justify your current valuation, and these are skeptics
obviously, you need to sell four hundred million of your razor blades,
for the razors, obviously, out into the future, is that a doable kind
of a number?
KIM EDWARDS:
Is four hundred million doable on..?
DAVID FABER:
On the diskettes.
KIM EDWARDS:
Well I suspect some time in the future that is conceivable if you've
got Zip to be the floppy for the multimedia age. Then that is conceivable.
To give you some idea, there's somewhere around sixty-five to seventy-five
million floppy drives sold a year, and last year the estimates where
eighty to ninety million hard drives sold a year.
DAVID FABER:
But you've got competitors out there obviously, who are also trying to
do the same thing. I know Compaq came out in March, and is offering
a similar type of product as well. It's not as though you're out there
alone... Is it?
KIM EDWARDS:
When you think about it, Compaq really isn't a competitor. What they
are is a supplier of PCs. I don't think that Eckard Pifer (sp?) cares much
what's in them in terms of the storage media, as long as it meets the
consumers' needs. So we don't consider Compaq a competitor, we
consider them a potential customer, and are working with them to
look at Zip drives going forward.
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