Iomega - A Civil Discussion Message Board

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Non-Tech : Iomega - A Civil Discussion

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To: HRP who wrote (1869)	8/5/1997 5:25:00 PM
From: Cogito	of 1908

HRP - Re: Tie ratios and OEM sales In the Q1 conference call, tie ratios were described as having been better than expected, up from the previous quarter. OEM sales, meanwhile, had risen from 10% to 20% of Zip unit sales. The tie ratios were given as the explanation of the fact that total revenues were down but net profits were up, relative to the previous quarter. I took this to mean that tie ratios were up significantly. In the Q2 call, tie ratios were described as "flat to slightly lower." Q2 OEM sales accounted for 30% of Zip unit sales. The point I am trying to make is that so far, the increasing percentage of OEM sales has apparently not had a big negative effect on tie ratios. You said that you don't yet see any evidence that increased OEM sales will not result in lower tie ratios. I say that the idea that they will is only a supposition. Therefore, until there is real evidence that tie ratios will decrease, I see no reason to assume that they will. Of course, as you say, it might just be too early to tell, as OEM units are still a small percentage of existing Zip drives. - Allen

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