Michael (or anyone), one question regarding:"The OEMs will apply real pressure on them when this product becomes anything close to standard."
I don't understand this statement, and frankly never have. IF Iomega makes something that "everyone" wants, becoming a de facto standard (which looks like it may be becoming the case), AND this item is protected by patent (which they say it is), AND nobody else has come out with a comparable item at a comparable price (which nobody has yet), then WHY would Iomega be forced to lower the price to a razor-thin margin? It looks to me like the OEM's would have to pay what Iomega wants to get for it.
Now, you say, Pentium chips are continually going down in price, H-P printers are going down in price, Toshiba laptops are going down in price, and the list goes on. But Intel has Cyrix & AMD, H-P has other laser printer competitors, and there are a whole raft of companies making notebooks. I say that's the reason for the price drops. Iomega has already, and is going to continue, to drop the price on the drives, but on their own terms, in order to keep the threat of competition minimal. Obviously, it's a whole lot more expensive to start up a competing manufacturing process from scratch than to keep chugging along pushing those drives out.
Can anyone tell me just how new or existing OEM's are going to force Iomega to become a break-even company? I'm not a businessman, this line of logic makes no sense to me.
Cameron |
