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Non-Tech : Any info about Iomega (IOM)?
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To: Sturgeon who wrote (7026)9/11/1996 11:20:00 AM
From: Trakker   of 58324
 
Rod,

I don't disagree with you in a sense. While IOMG will no doubt have to lower their margins to effectively withstand competition, the actual margin loss may not be as significant to deter Matsushita. When you figure that they have obviously figured out how to make money based on their power as a floppy drive manufacturer, they can most likely do the same with Zip. By using their leverage with component suppliers, they can probably build at a cost lower than what IOMG can, combined with their working agreements with OEMs they can then sell a higher volume (kind of speculative, but that's the risk/reward of the rollercoaster).

So, while IOMG may bring down their drive margins -- they have established licensing agreements that off-load production costs while still keeping most of the blade, high profit revenue. So based on their Sony and now Matsushita agreement, maybe instead of comparing IOMG to Seagate/Quantam we start evaluating them based on the 3M media model. Just a thought.

trakker
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