Barron's has declared that Sony will kill Iomega!
(Of course i think they are wrong)
Comdex Trade Show Offers Few Humdingers But at Least One Threat to Iomega's Zip Drive
By ERIC J. SAVITZ
Among the few truly significant developments at the
recent Comdex trade show and publicity fest in Las
Vegas was the growing proliferation of new
data-storage devices. Most of the attention went to the
myriad of both recordable and rewriteable CD drives on
display, plus a wide variety of DVD drives. Almost
anyone trying to show off high-quality audio and video
capability hooked up to a DVD movie, generally with
impressive results. (We were almost blasted out of our
chair by a Philips home theater demo that featured a
DVD clip from one of the Batman movies.)
Personal-computer software making use of the DVD
standard, however, was hard to find, suggesting that
Christmas sales of the players could disappoint.
The DVD players on display weren't limited to video
playback-a slew of companies demonstrated rewriteable
DVD drives. Annoyingly, manufacturers of the new gear
have split into two camps, one supporting a standard
called DVDRW, the other dubbed DVD-RAM.
Whichever standard wins out, the approach certainly
provides astonishing storage capacity, close to six
gigabytes on a single double-sided platter. This will no
doubt show up sooner or later on a PC near you.
Equally intriguing, though not as well publicized, was the
new 3 1/2 -inch drive from Sony and Fuji Photo called
HiFD, for high capacity floppy drive. It's a product that
has the potential to create a serious shift in the way
computers handle removable storage. HiFD discs look
exactly like the 1.44 megabyte floppies now in common
use. The difference: They store 200 MB per disc.
Importantly, the drives are 100% backward compatible
with 1.44 MB discs. They'll play both standards easily.
Sony, which expects to introduce the new drives in the
first or second quarter of next year, says the standard
will also be supported by Teac and Alps Electronics.
Eventually, if all goes according to plan, the new
standard could replace the much lower capacity drives
that now come with every personal computer. The other
implication of the new drive involves Iomega, maker of
ZIP drives, backup storage systems for personal
computers. Sony says an HiFD floppy will have twice
the capacity of a ZIP cartridge, with much faster data
transfer rates. The company plans to price the new discs
a tad higher than the ZIP cartridges, but not much -- and
remember, it can handle older floppies, which the ZIP
can't.
In short, HiFD looks like an Iomega killer. And
Iomega looks like a pretty fat target. Last week,
Iomega shares were trading at about 32, having more
than doubled since March, boosting the company's
market cap to about $4.4 billion. According to Zack's,
the Street expects Iomega to earn about 89 cents a
share this year, and $1.25 next year. Trading at close to
26 times estimated earnings for next year, Iomega is far,
far more expensive than others in the data-storage
sector. And now it faces a huge new challenger in the
market for removable storage.
Now, to be fair, Iomega had a new product of its own
to show off at this year's edition of Gridlock in
Gomorrah -- a line of ultra-small drives called Clik!
targeted at digital cameras and hand-held computers.
(At its Comdex booth, Iomega gave away annoying
little clicking gizmos and promised to give away prizes to
a lucky few spotted wearing a Clik! button while clicking
their clickers. It's a wonder they didn't incite violence.)
None of the gazillions of digital cameras we saw at
Comdex made use of the new Clik! drives, though, and
ZIP drives still account for most of Iomega's revenues.
Iomega, which still likes to claim the ZIP drive will
replace the floppy drive, now faces the prospect that the
floppy will, in fact, be replaced by a super-duper floppy
with backwards compatibility. Just why you'll need a
ZIP drive when that happens isn't clear. |
