SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Non-Tech : Any info about Iomega (IOM)?
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: David Ronemus who wrote (7861)9/27/1996 10:11:00 AM
From: davesd   of 58324
 
IOMG's profitability is hardly something to write home about. They had sales of over $250,000,000 and a profit of 10c/sh, that's a very low gross margin. If margins fall further and they get others to make their equipment, therefore sharing profits, the 10c/share may be a high water mark.

I think the $50 rebate on a Zip is more an indication of slowing sales than an attempt to gain more market share, they have virtualy no competetion in this area so why reduce the price on a hot selling product. IOMG will have to continue to reduce their reduce costs to maintain their unit sales. With these reduction in margings, the question is will they be able to make it up with much higher sales volume and reduce their production costs. I'm not sure about increased volume due to their statements of slowing demand a month or two ago. We may have a XMAS rush, but that ends in December.

Having someone else manufacture their stuff is a good idea, but remember they will want a fixed profit regardless if IOMG makes money on it.

Also, any product that reaches a standard status has to be very inexpensive and has to be made by multiple manufactures. Take a look at the regular disk drives or hard drives today, they are standards but there is barely any margin in it, and their PE's are in the single digits.

This coming quarters earning will be very interesting.

dave
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News