Joe, There have been rumours of IBM for a few weeks. However, I
believe a lot of people have been discounting rumours. With all the
misstatements and speculation surrounding this stock, I don't blame
them for doing so.
Since both IBM and Iomega announced this deal, the rumours have now
become reality. The stock reacted accordingly. However, we not
know if this news establishs a new trading range for Iomega. However,
with IBM jumping onto the Zip train, it puts more pressure on the
remaining vendors (Apple, Gateway, etc...) to provide Zip drives on
some of their systems. Backing by more OEMs should continue to
help the stock but I think the impact will be marginal at best.
The real test for Iomega will be this quarter's earnings. The
earnings will have to show solid quarter on quarter growth.
The year on year figure is meaningless since the company didn't
really have a product pipeline developed this time last year. Beyond
earnings, we will have to see if the OEMs expand the number of models
with Zip drives. HP will have the inside track since they have
been selling Zip installed models the longest and will have the
best sales data for trend analysis. Around September, the OEMs will
have to make decisions on their fall (Christmas) models. If HP or
other OEMs expand the number of machines with built-in Zips, Iomega
will have a lock on establishing Zip drives as a floppy standard.
If not, the window of opportunity opens....
Heeren |
