"I think the Zip lead is pretty much insurmountable right now, and by the
time the LS-120 is in mass production, it will be completely insurmountable.
I would guess 2-3 million installed users of the Zip right now, all spreading
the word about the "coolness" and capabilities of the Zip."
Armen,
Remember Herb Greenberg, the SF Chronicle journalist who last year shorted
IOMG, then tried to single-handedly crash IOMG 's price with a barage of extremely
negative articles? He recently interviewed Compag execs about Zip and LS-120,
probably trying to crash IOMG again - but it appears that the interview
backfired on his intention.
(Mr. Greenberg just 2 weeks ago said that AMTX is worth 35 cents a share
(vs. $22/share at the time) and published totally untrue "facts" about AMTX 's
technology ownership - which he corrected the next day as AMTX official
moved to correct his statement. He also admitted that he shorted AMTX.)
If even this guy can't dig up any more dirt on IOMG, things must be looking up.
Young
Follow is an AOL MF repost on the HG interview:
------------------------
Subj: Compaq interview
Date: 96-07-04 16:13:43 EDT
From: RICORNFELD
A little more about the Herb Greenberg interview of Compaq executives.
It can be found at Bizinsider under Iomega Insanity. Greenberg interviewed
Jerry Meerkatz, vice-president of the Options Business Unit at Compaq,
and Sean Burke, director of Presario marketing. Considering this column
was intended to present Compaq's side of the LS 120 vs. Zip debate, it
was interesting how weak it was.
First, it is clear that Compaq has conceded the consumer market to Zip.
Burke said that Compaq has no intention of putting the LS-120 in a
consumer product. He believes that a Zip-like product is more marketable
as an after-market item than in an OEM. "The Zips are selling, but as an
aftermarket item. They're a great aftermarket item. It may be one of the
best add-ons ever introduced."
Meerkatz said, "I want to make it clear that Iomega technology and its
drives are excellent. . . . This is a dogfight in terms of who is going to be
the group with the technology that will be setting the standard, and it comes
down to two excellent technologies. Iomega is emerging as a clear standard
in the consumer marketplace, but not in the commercial marketplace.''
Meerkatz contended that the key factor in winning the commercial marketplace
was backward compatibility. However, he also made it clear that, for LS-120
to beat Zip, "the LS-120 guys had better be hot and heavy in signing up
more OEMs than Compaq."
It is not clear whether the interview occurred before the Zip rebate program
was announced, but, to listen to Meerkatz, it had to be a good move for
Iomega. "Whoever makes it the standard,'' he said, "will have to make
this technology very affordable. And right now it's too expensive.'' (At
the same time, Meerkatz said that the Compaqs with the LS-120 in them
were selling well, but in view of that comment one has to wonder.)
How committed is Meerkatz to the LS-120? Here is his ringing vote
of confidence: "If the LS-120 doesn't make it to being the standard,
Compaq will move.''
My take on these interviews is that Compaq obviously believes that
Iomega won the "battle" in the consumer marketplace before the
LS-120 even entered it. In other words, the battle is over before it
began. However, they assert that Zips will sell better as an aftermarket
item than one "in the box." They believe that consumers wuld prefer
to spend their OEM money on items like faster processors. Obviously,
that remains to be seen, but whether consumers buy their Zips with
their systems or later, it is a win-win situation for Iomega. Of course,
if Compaq can convince consumers that they are better off with a
faster processor while buying the Zip as an aftermarket item, then
they can compete with all the Zipped-up HP's, IBM's, PB's etc.
As far as the commercial marketplace is concerned, it is hard to imagine
a different standard than in the home market. For example, I would have
no use for an LS-120 in my computer at work if I didn't also have one
at home so that I could transport files back and forth. It would be as
useless as having WordPerfect at work and MSWord at home.
Rick
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