Hi Jay.. Sorry I'm late responding to you post.
You said:
They sell floppy for, what, about $20, while they sell the Zip for
about $99. So the OEM gets $5 for every floppy and $29 for every
Zip. Which adds more to the bottom line. Also, which adds more to
sales? The Zip! It seems like Zip is win, win on these notes.
Add to this the fact that the OEM is suplying the "HOT" item, and
Zip seems to win all the way around.
Where am I going wrong in this analysis?
****************
For a 'standard' PC, the price at which they can sell it is FIXED
by the market. Manufactures can't afford to jack up the price of
their product to compensate for the higher factory cost of the Zip.
They would sell less because their box costs more than a competetors box on
the shelf next to it. Therefore, they have to eat the cost of the Zip.
This directly results in lower profitability. (Manufactures will assemble
large teams of engineers to lower the factory costs of boxes by pennies.
adding a zip as standard would KILL) Makers are much better off offering
ZIPS:
(a) as on option (make the customer eat the cost)
(b) leave it as an aftermarket item.
Again, with current floppies, networks, CD-ROMS, etc.. The Zip is
not a REQUIRED feature, therefore, as I stated before, I cannot see
this device as replacing the floppy until the costs come close to
equaling the floppy. (by that time, margins are shot, and the drive
and disks are just commodities).
I'd be willing to bet that Iomega is not making money on drives they
are selling to OEM's right now. Anyone want to take me up on that?
kp |
