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Non-Tech : Any info about Iomega (IOM)?
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To: Franco Forghieri who wrote ()9/12/1996 8:40:00 PM
From: Steve Wiz   of 58324
 
TO ALL:

I encourage everyone to read the Emerald Research report on
emeraldresearch.com. After reading it im not sure im so bullish on the move. In the report it states the MCI is more concerned with the OEM channel than Retail. But-It says that MCI
is considering producing the Zip under the Panasonic label at retail.
This sounds great right off the get go but in the report it also states that Iomega will receive *relatively small royalty payments and are considered to be incremental to Iomega's net earnings. IMO this might have the effect of cannabilizing Iomega's Zip sales in the retail market. Why such small royalty fees? Is Iomega giving away to
much. Im sure everyone will agree with me that giving a Japanese company technology and expecting them not to compete against you is
dangerous. I do agree that the Zip needs many more manufacturers but
at what price are we willing to pay.

I would have liked to receive a little compensation for giving away such great technology-But MCI being a large Japanese company probably demanded everything for free. Maybe someone else can answer this but
why did it state that "Iomega realized that OEM's would not consider the company to be a high-volume manufacturer" Why the hell not?

I also think that Iomega is quite vulnerable in this move since
Matshushita's other division MKE is the *sole* supplier of the LS120.
Let's say for a moment that Matshushita receives higher margins from the LS120 drives over the Zip. Will they be inclined to push the Zip
into OEM's hands? I think this is an important point. It says that Emerald beleives that Mat will not push one technology over the other
but I think this is quite naive. Mat's division MKE has placed hundreds of millions of dollars into LS120 research and development
and has been poised to re-capture the next wave in computer storage.
*I repeat the LS120 is a son or daughter to MKE ie Mat and the Zip it could be said is a step child. Mat has a definite monetary obligation
and vested interest in seeing the LS120 succeed. Mat does not have any thing to lose by this deal-because they are not paying anything
for royalties on the zip. (they are miniscule)

Everyone has to realize that Mat's MKE unit has invested in the LS120 technology time and resources and will not throw this away. Japanese congolomerates do not relent they dominant and destroy industries. Do
you really think that MAT will be putting more resources, man hours and money into a product that they do not own the technology and or a piece of the origianl business. If MAT is placed in the predicament that they can only chose one product to push to a certain OEM does anyone even question which one it would be? Matshushita Communications or Matshushita Kotobuki it doesnt matter they are both part of Matshushita's Keiristu. MAT is calling the shots.

I have a source that has told me that Seagate is in discusion
with MKE to liscense the LS120 technology. Now, if this is true, it
is **critical that Iomega get Seagate to either liscense the Zip or
give them the same deal they gave MCI. IF Seagate moves to the LS120 camp Iomega is dead. It is very important that Iomega get Seagate **totally aligned with Iomega-hence in their camp. Seagate is the definite wild card in this scenerio. If Seagate is lured into aligning
its fortunes with Iomega-Jazz media and total Zip manufacturing then Iomega has protected itself nicely.

I am *very* long-but concerned

THE WIZ
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