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Non-Tech : Iomega - A Civil Discussion
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To: Cogito who wrote (1864)8/5/1997 9:19:00 AM
From: HRP   of 1908
 
Posted by HRP:

>>An increasing percentage of production is being shifted to OEMs where the
margin is smaller and where concomitant disk sales are, at least initially, less. <<

Response from Allen Murdock:

<< HRP -

I'm not sure that this is true. I realize that this is the commonly held view, and it
seems like good intuitive reasoning. However, for the last two quarters OEM sales
have been increasing as a percentage of overall sales, yet tie ratios have actually
gone up.

The facts appear to contradict the common wisdom.

- Allen

PS: I believe that the phrase "common wisdom" is an oxymoron.>>

Allen:

I don't know what your claim that "tie ratios have actually gone up" is based on.

In the last conference call ZIP tie ratios were described as relatively flat. (JAZ ratios were reported as increasing.)

To determine (as opposed to reason) whether tie ratios for retail sales differ from tie ratios for OEM sales for a given time period you would have to collect your data separately for the two groups.

Even if the overall tie ratio did increase for a period in which OEM sales were increasing as a percentage of total sales, no conclusion could be drawn that tie ratios for OEM sales equals or exceeds tie ratios for retail sales since (for example) tie ratios for OEM sales could be less than for retail sales at a time in which tie ratios for retail sales were increasing. This is particularly true while OEM sales remain a small percentage of OEM plus retail sales for the previous and *all* prior quarters. (Tie ratios are based on all production - not production for one quarter.)

My reasoning may not turn out to be correct ... but, I don't believe that there is any convincing contradictory evidence to the contrary ... yet.

HRP
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