Here is another comment from WSJ (the interactive edi):
Matsushita Unit to Produce
Zip Drives in Iomega Pact
By DEAN TAKAHASHI
Staff Reporter of THE WALL STREET JOURNAL
Iomega Corp. shares rose sharply Tuesday, after the
computer disk drive maker announced that a unit of
Japan's Matsushita Electric Industrial Corp. will produce
compatible versions of Iomega's most popular product.
The additional production brings Iomega's Zip drive,
which stores masses of data in a removable cartridge
similar to a computer's floppy disk, closer to becoming an
industry standard for removable drives. Matsushita
Communication Industrial Ltd. will make Zip drives under
a nonexclusive license beginning in the fourth quarter, an
Iomega spokesman said.
Iomega, of Roy, Utah, was the second most traded stock
on the Nasdaq Stock Market Tuesday with a volume of
7.3 million shares, and it surged 16%, or $2.125, to
$15.4375.
The Zip drive, which stores about 70 times the data of a
floppy disk, is a convenient way to transfer data and
programs.
As computer programs use more information, the drives
are seen as an increasing challenge to the traditional
floppy disk. Seven major PC vendors are using the Zip
drive in some of their models.
In the past 21 months, Iomega has sold over two million
Zip drives, which retail for about $200 apiece, and the
company's stock price has been on a roller coaster ride.
Iomega traded as high as $54 a share in May, following a
2-for-1 stock split. In the past few months, the stock slid
along with most other high-technology issues, and has
lately been a favorite of speculators betting on a further
fall in the share price.
The licensing deal with Matsushita "is intended to expand
[Iomega's] market," said Todd Bakar, an analyst at
Hambrecht & Quist in San Francisco. He said, however,
that it is too early to say whether high-capacity removable
storage will really replace floppies.
The Zip drive also competes with another removable disk
that was designed by a partnership of Minnesota Mining
& Manufacturing Co. and Matsushita-Kotobuki
Electronics Industries Ltd., another unit of Matsushita
Electric. |
