>>Allen: If they have a TRO in a U.S. court against the infringer, though, they can prevent any of the disks from being sold. Obtaining that TRO would prudently be done well before any attempt by the infringer to ship to the U.S. For all we know, they may be in the process right now. <<
Trufflette -
Not actually sure what a TRO is (some form of Restraining Order?), but certainly if Iomega petitions a U.S. court for an injunction against patent-violating disks, they will get it.
My post referred only to my belief that the Customs department won't enforce patent laws unless specifically directed to do so by the courts. Iomega has to start the process, and I agree with you that they probably already have.
But to go from the specific to the general, I think that there are enough people still short on Iomega, most of them being under water at this point, to still generate quite a bit of negative noise in the financial press. Thus, the Nomai story is being mentioned more and more. And I notice that the mentions in the press don't always include the fact that Iomega has gotten injunctions against Nomai, and that they may never be able to sell any XHD disks.
Certainly, none of us should just dismiss the Nomai threat. There is a real possibility that this will negatively affect Iomega earnings.
But I just did a few quick and dirty calculations. Iomega has sold more than 8 million Zip drives to date. At a tie ratio of 5 to 1, that would mean 40 million disks. 7 to 1 would be 56 million disks, and 10 to 1 gives you 80 million. (Meanwhile, my wife has had her Zip drive for just a couple of months and already has 24 disks. She just bought a Jaz with three cartridges.) This seems to produce a run rate range of 15 million to maybe 30 million disks a year (very roughly).
Nomai intends to produce 500 thousand disks a month, or 6 million a year. So even assuming that Nomai could sell every disk they could make, and that every buyer of a Nomai disk would otherwise have been buying Iomega disks, Iomega would still be selling somewhere between 9 and 24 million disks annually. But I wouldn't buy those assumptions about Nomai and their customers.
I note that many of these news stories have repeated the idea that Nomai's production costs are far lower than Iomega's. How would the reporters know that? They don't know Iomega's costs. I don't believe Nomai can produce XHD disks that much cheaper than Iomega can produce Zip disks, especially considering that Iomega has the advantage in terms of quantities.
I do not dismiss Nomai. I expect that the stock price may well suffer temporarily. But I have held through dips before. At this point I am so far in the money, I'm not too worried.
- Allen |
