Dale, I would suggest that there hasn't been flattening demand but merely a bump in the road. There are two factors that reveal that actual demand has been skewed.
First is that IOM had lost inclusion in CPQ's systems over the last two quarters to LS-120. That's changed and CPQ is now selling Zip in their systems again and as pointed out by Jody one system with Zip built in is priced under $1000. I suspect that CPQ has learned it's lesson with the LS-120 and will not be including them again. Now something other than a gut feeling told CPQ to can the LS-120 and start selling Zips again and my gut feeling is that it translates to dollars. If their decision is based on the popularly of Zip and demand from their customers than I would say sooner, than later we will see Zip standard in the majority of systems.
Secondly, It was revealed that Iomega's production was constrained by a shortage of chips and that they had allocated available chips to their licensee partners.
The question as Sierk said, should be how many disks have we sold, but that aside, clearly Iomega could have sold more drives had they kept their chips. Further there is an unknown in this so called drive count, which is, just how many drives are the licenses producing Addonics, NEC, and two or more others are producing and selling Zip drives.
Unless I'm mistaken even IBM has been granted a License to produce drives whether they are making them, or will make them is another issue, but the ground work has been laid for that to happen.
Even as a stock holder, I am first a business man and the drives I sell are NEC produced Zip drives. There is virtually no difference in the drives, you cannot tell one from the other by looking, the NEC drives are cheaper for me to buy. I have asked my suppliers about the NEC drive sales compared to Iomega's and the story the trade gives is that the NEC drives that are by far outselling Iomega drives in their perspective markets. I can't provide numbers but no doubt a number that is affecting IOM's top line figure.
One more thing to consider, even with the loss of Compaq's sales for most of the last two quarters IOM sold all the drives that could be made. Welcome back CPQ.
BTW this also skews your tie numbers.
Regards
Reseller
ps, that room that was suppose get painted today didn't, spending too much time on the net. oh well |
