SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Any info about Iomega (IOM)?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Trakker who wrote (7108)9/13/1996 7:44:00 PM
From: Bill Fischofer   of 58324
 
Zip1 OEM deals clears the deck for Zip2

It's now clear that IOMG's long-term strategy is as follows:

1. Establish proprietary high-margin media standards (branding, marketing, etc.).

2. Introduce high-tech media devices (Zip, Jaz) as "boutique" items to sell to the first-wave add-on consumer.

3. Reduce manufacturing costs, spin off drives to low-margin OEM players (MCI, etc.)

4. Repeat with next-generation media and drives which provide migration path for current consumers while reinforcing media brand strength.

MCI will drive the OEM costs of Zip1 drives down to the dirt level. If they can make a profit selling $20 floppy drives they can make a lot more profit selling $40 Zip drives. They also deal in the sort of volumes (1+ million units per month) which are needed to supply the OEM box channel. Meanwhile this frees up IOMG to concentrate on the marketing side and the introduction of Zip2. I don't believe KE sees IOMG's future as a high-volume manufacturer of anything but the high-margin media.

As far as introduction of Zip2 goes, I do not believe you'll see Zip2 (again at the magic $199 price point) until Zip1 is reduced to $99. This should happen sometime in 1997. You need to provide a sufficient price differential so that the two products appeal to different customer sets and I don't think $50 is wide enough. It is also important that Zip2 be available in volume when it is first introduced, and this is another factor which will delay it. When Zip1 was introduced they could afford a ramp period since it was new and it took time to get folks sold on the idea. Zip2 will be presold and I think IOMG knows that the demand for Zip2 will be huge at introduction so they have to plan for it. That said, it would make sense for IOMG to be ramping Zip2 internally while MCI takes over volume manufacture of Zip1.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News