All: Potential Zip and Jaz market size and IOMG revenue/earning. (Great things still to come.)
Looking past this quarter 's earnings and sales, here are some to think
and DREAM about. The following two paragraphs came from HMTT's
latest prospectus (Mar 13, 1996):
-------------------
"The Disk Drive Market.
Market demand for disks and disk drives is growing rapidly, stimulated by
demand for new computers, upgrades to existing computers and the
growing use of sophisticated network servers. The introduction of increasingly
powerful microprocessors and more memory intensive software, combined with
the development and growth of multimedia computing application
and Internet usages, have stimulated demand for PCs in both the
home and business markets. According to International Data Corp
(IDC), wolrldwide shipment of PCs were 39 millions in 1993, are estimated
to have reached 57 millions in 1995 and are projected to reach approximately
97 million units in 1999. In addition, the PC server market, driven by the trend
toward networking applications and the expansion of the Internet, is expected
to grow at an estimated 24% per year for the period from 1995 to 1999.
The combined demand from the PC and server markets has resulted in strong
growth in in unit shipments of disk drives. Worldwide shipments of hard disk
drives were 50 million units in 1993, are estimated to have reached 90 million
units in 1995 and are projected to reach 135 million units in 1997.
According to IDC, the worldwide market for hard disk drives is estimated ti
have reached 21 billions in 1995. Strong overall demand for disk drives has also
stimulated the growth of the thin film disk market. According to Trend Focus,
the number of thin film disks produced in 1993 was 134 millions, is estimated
to have been 236 million in 1995 and is projected to reach 347 million in 1997.
The worlwide market for thin film disks is estimated to have been 2.5 billions
in 1995. "
<snip>
My reads from above:
1. Conservative potential annual market size for Jaz drives is between 57 and
97 million between now and 1999, based only on PC unit shipments, plus potentially
huge new markets for Jaz drives and disks such as audio/video, graphic arts,
publishing, etc. (I am quite sure the IDC data did not include new uses for
removable hard drives and disks.)
2. Potential annual market size for Zip drives is also between 57 to 97 units between
now and 1999, plus potentially huge new markets from new uses such as
AcerBasic network PC, Pippin @World game terminals, Internet boxes, etc. Acer
said that they expect to sell 200 millions AcerBasic in Asia by 2000. Also, I don't
think the above PC shipment estimate (57-97 mils) included laptops, which is
projected to ship around 12 million in 1996 and is growing very fast.
Forget about the Zip and Jaz becoming standard in every PC, let 's just assume that
Zip and Jaz only cracked 30% of the traditional drive markets by 1999, plus the new
markets. Can you see the possibilies? Right now, with an estimate of only 5 millions
Zips and perhaps a few hundred thousands to a million Jaz drives sold in 1996 ---
revenue is already 1.50 bils estimate. What would revenue and earnings will be when
tens of millions Zip and Jaz are sold?
1999 revenue potential, assuming "A ZIP AND A JAZ IN EVERY COMPUTER." :
97 millions Zip drives sold a year at 75/ea. (avg. all sizes) would be 7.3 bils revenue.
97 millions Jaz drives sold a year at 250/ea (avg. all sizes) would be 24.2 bils.
970 millions zip disks a year at 5/ea. (avg., 25, 100, 200, 400MB) would be 48.5 bils.
450 millions Jaz disks a year at 50/ea. (avg, 1, 2, 4GB) would be 22.5 bils.
7.9 + 24.2 + 48.5 + 22.5 = 103.1 Bils.
"BUT WAIT, THERE 'S A LOT MORE..."
Zip: Laptop, AcerBasic, Pippin @World game terminal, Internet boxes,
Industrial Process C/M/A (control, monitoring/automation) PCs.
Jaz: Audio/Video, graphic art, publishing, Industrial Process C/M/A PCs.
IF Acer 's vision of selling 200 millions AcerBasic in Asia in the next few years
is realized, an additional 20.0 bils revenue from Zip drives alone will come from
this source in the next few years. (A big IF!).
But let's just forget about impacts from these potential new markets and get back
to potential 1999 revenues from traditional PC market alone: $103.1 bils.
So let's say Zip and Jaz each only crack 30% of the PC market by 1999. That
would be revenue of 30.9 bils. Assuming net margin of only 8% from this razor/razor
blade business, income would only 2.47 bils a year.
OK, let's drop it down to 15% market penetration, and also assume that none of
the other stuffs (AcerBasic, etc.) took off in the meantime: 15.4 bils revenue and
1.2 bils earning!
Perhaps I am out of my mind, but I just want to illustrate a point. I see
huge possibilities no matter how I look at it. Where is the down side?
Young |
