Article from Investors Business Daily Web Edition:
Iomega Licenses Zip Drives To Matsushita
Date: 9/11/96
ROY, Utah (Bloomberg) - Iomega Corp. agreed to let Matsushita Communication Industrial Co. of Japan make and sell its popular Zip removable disk drives.
The agreement gives Matsushita a non-exclusive worldwide license to produce Zip drives and sell them under the Matsushita name. Production will start in the fourth quarter, Iomega said.
The news gave Iomega's shares a lift after months of poor performance. The shares, which had fallen more than 70% from a high of 54 on May 22, rose yesterday 1 1 1/16 to 15 in midafternoon trading.
''This licensing agreement is significant to our overall strategy of establishing Zip as a worldwide standard supported by world-class companies,'' said Tony Radman, Iomega's senior vice president of strategic business development.
Roy, Utah-based Iomega has been working to make its removable disk-drive products an industry standard by signing up other manufacturers and getting computer makers to put Iomega drives in their machines before shipment.
Matsushita, one of Japan's first floppy disk-drive makers, is part of the Matsushita Group, a subsidiary of Matsushita Electric Industrial Co.
Iomega faces stiff competition from rival memory makers, including Mitsubishi Electric Corp. of Japan, which earlier this year said it plans to make similar disk drives.
The Mitsubishi drives will be based on LS-120 technology, which Compaq Computer Corp., the world's biggest personal computer maker, sells with its PCs.
Concern about intense competition from rivals and signs that Iomega's once-explosive sales growth is slowing have weighed on the company's stock in recent months.
Iomega shares plunged 20% July 19, after the company told analysts and investors on a conference call the day before that third-quarter sales could be weak.
(Isn't it interesting that Syquest is not even mentioned by name as an Iomega competitor anymore.) |
