Ken,
Why do your rules of business change for the PC makers versus Iomega.
You have repeatedly insisted that the PC makers will not "eat" the extra
cost of a Zip drive versus a 1.44 floppy. However, when it comes to
Iomega, you insist that they MUST be losing money, and liking it:
>>I mean, Acer claims they want to sell 500 million of these things.
Is this possible? How can Acer stand the factory cost of these ZIP
drives? (Iomega MUST be losing money with the ACER deal.)<<
First of all, let me preface my comments by saying 500 million may be
extreme but...How many $/drive below cost do you think that Iomega
would sell 500 million drives for? $1? $2? $10?? You would have to
be a fool to try to tell me that Iomega thinks that this market is big
enough that they could afford to lose $500 million or more ($5B) on the
drives in order to reap a whole lot of disk sales. It's big, but not
that big, at least not in the real, real near future.
Kim Edwards has repeatedly insisted that Iomega is not selling drives
below cost (I think they know this won't work... witness the failure
of SYQT). Besides, why would Epson, who has no (?) disk revenues, sell
the drives BELOW the cost of the Iomega drives. Now you are trying to
tell me that Iomega has duped a different company into losing money.
Finally, why would the obviously astute IOMG management wrestle control
of drive subcontractors away from Epson (and Sequel) and shift extra
production to their masterffuly ramped up Penang facility just to lose
even more money. Give me a break!!
Jay
LONG on IOM(G) |
