Dale,
There are a few things that I find to be rather fascinating about SyQuest right now.
#1) SyQuest has negligible gross margins, which means to me that they are selling their drives (including SyJet at a loss.) I base this on the fact that the cartridges have very good gross margins, yet overall gross margins are negligible.
#2) SyQuest recently dropped the price of the external SyJet from $399 to $299 to match the price of the internal. Given #1, what does that say about SyJet? Is SyQuest trying to blow out current SyJet inventory in anticipation of a new drive?
#3) SyQuest is rumored to have 3 distinct new products coming soon, SyJet 2.5, SparQ, and Rocket. Given that R&D budget for SyQuest is drastically down, 5.4M in 1996 Q4 to 2.5M in 1997 Q4, how is SyQuest developing so many new products? Compare that to Iomega's R&D budget which was 23M for the quarter ending Sept. 30. |
