Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Stan Walker who wrote (6829)	9/2/1996 11:05:00 AM
From: Fred Fahmy	of 58324

Stan, Hopefully, any decline in ZIP drive margins (which I do people will occur but will be mitigated to some extent by cost reductions) will be compensated for by increasing sales of high margin ZIP and JAZ disks/cartridgess. I have to believe that a slight/moderate (slight/moderate because cost is also coming down; rate unknown?) decline in ZIP margins was part of the original strategy and economic Iomega financial plan. The third quarter may be soft but I think chances for a poor quarter are remote. As you pointed out "long-term" is the key. A huge part of the Iomega game plan is to make ZIP the undisputed standard. That means, volumes, volumes, volumes. Each installed drive is one more step in assuring that ZIP continues its path towards that goal. This is not to discount the enormous financial potential of JAZ and future products. At best Iomega will post results better expected and I think this would signify the bottom with upward pressure. At worse it will be a disappointment which I think the current price reflects. This might drop the price with one more bang, but I think this new price would also signify a bottom because the outlook for Q4 together with the future potential of ZIP will lead to a significant steady increase in the value of IOMG. It is important to remember that with all the key OEM deals (I think 9 at last count)already in place, if the #1 goal of supplementing/then replacing the 3.5" disk succeeds they will have ZIP revenues and earnings orders of magnitudes greater than today. KE said at the Q2 earnings release that contributions from OEM business at this time were insignificant. If/when this does become significant the company's value will be orders of magnitudes greater. Some people (and I have yet to hear a sound argument for this case) don't think ZIP has a chance of becoming the next floppy standard. I can't see a way that it doesn't become the standard and in some respects I think it already has). The conversion from 3.5" to ZIP disks being sold in PC's is occurring the same way the 5.25"-3.5" conversion occurred. The only difference is that this time ZIP has the advantage of having already sold MILLIONS of the external versions of ZIP drives through the retail channel. FF

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