FYI
PALO ALTO, Calif., June 18 (Reuter) -
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Some analysts have said a key hurtle for Iomega has been whether it can establish its technology,
particularly the Zip Drive, as a new standard across the industry.
One industry consultant who follows the storage media market said that personal computer makers are not
likely to add higher-priced drives, despite the rising demand for higher-capacity hard disk drives and
ever-larger files, when they can supply basic 1.44 megabyte drives for about $20.
"Some PC makers would rather kill their mother if it would save them $20 or more on component costs,"
he said.
The LS-120 has the advantage that current 1.44 megabyte diskettes and older, 720 kilobyte diskettes can
also be run in the unit at speeds of up to three times faster than conventional 3.5 inch floppy disk drives.
Iomega's Zip only operates its own 100-megabyte disks.
Iomega is very thinly covered by investment analysts. Perhaps the most prominent of these, Howard
Rosencrans of the Great Neck, N.Y. firm of H D Brous, said the lack of major support from Wall Street
institutions may have been more of a factor in its volatile decline than any news development.
"I think you have, in general, a lack of (Wall) Street support," he said. I think that you haven't seen Wall
Street as a whole adapt this thing. That's been a major factor."
Rosencrans said he does not expect Mitsubishi's LS-120 production to have a major impact on the PC
storage market.
"I don't see them as a major factor in the marketplace, frankly," he said of the Mitsubishi announcement.
"Effectively you're talking about the same technology, the LS-120."
He also discounted a recent 230-megabyte removeable hard drive, the EZFlyer 230MB, being marketed by
SyQuest Technology Inc , which is in a turnaround he thinks will fail.
Rosencrans said he maintains his "buy" recommendation on the stock, which he initially recommended in
March 1995 at a split-adjusted price of $1.
--sam.perry @reuters.com, Palo Alto Bureau, +415 462 2610
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