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Non-Tech : Any info about Iomega (IOM)?
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To: sheila rothstein who wrote (46492)1/31/1998 11:31:00 PM
From: Michael Coley  Read Replies (2) of 58324
 
RE: Another Theory on the Q4 Tie Rate Drop.

Here's a question that I'd like to throw out to the group:

Are the number of disks sold more a function of drives sold in the quarter or total installed base?

All along, we've been assuming that it's a function of the drives sold in the quarter. That's an easy assumption to make since we calculate it based on the quarterly sales of disks / drives. But I don't necessarily think that's accurate.

I have approximate quarterly Zip unit sales in a spreadsheet, and I compared the quarter-to-quarter unit growth rates with the quarter-to-quarter installed base growth rates, and found something quite remarkable. For Q1 96 - Q3 97, the installed base grew slightly faster than the quarterly unit sales. Q4 was a striking contrast. The amazing unit increase of 62% dwarfed the installed base increase of 36%. (Also, the installed base increased significantly more than the unit sales in Q2 96, Q3 96, and Q1 97.)

In my forward projections, I see installed base increasing more than unit sales in Q1 97, then for a leveling out for the rest of the year.

If tie rates are indeed correlated with installed base rather than unit sales for the quarter, we'll see the tie rates bounce back in Q1 and stay at the same level for the rest of the year.

- Michael Coley
- wwol.com
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