You said:
" 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: "
MY COMMENTS:
Acer's PC cannot have a factory cost (materials) of more than $250.
When I start adding the stuff that they are including in the box. (I
do have a VERY good idea at what companies pay for components..) I
have about $30 left for the ZIP drive. My guess is that in order to
get this deal, Iomega had to offer Acer EXTREMELY good pricing to get
this deal. Acer is not stupid.. They are not going to leave money
on the table. None of you realize how much pennies is worth in the
buisness (especially at the low end). I guarantee you that IOMEGA
approached ACER and begged for this deal.
All you on this thread think that PC makers will fall head over heels
to put a ZIP drive in their system, offering ANY price to Iomega. THIS
IS NOT THE CASE! The difference between staying in buisness and going
bankrupt can be as little as $1 per system in factory cost. Low and
midrange computer makers will NOT throw away money. They will drive
the cost of the ZIP down as low as humanly possible.
You all have to keep things in perspective here. The ZIP is not
Gods gift to mandkind, or some magic device that all PC makers MUST
have in their systems at any cost. IT'S JUST A SIMPLE BACKUP DEVICE!
You CAN live without it (life would be more difficult, but hey this
is the truth). It's a 'toy', basically. The vital items on a PC
nowadays is: CPU, MEMORY, MODEM, CD-ROM, FLOPPY, HARD DRIVE, KEYBOARD.
These are the essentials. Any add-on must have the right cost for
it to be viable. Believe it or not, the simple $17 floppy is good
enough for 95% of cases, and the network works well for the rest.
When the ZIP costs $17, THEN it will be the absolute standard.. But
how much will Iomega make per drive then?
I'll restate my supposition one more time:
** Iomega is making a pile of money off drives sold to consumers.
when demand slackens here, there will be BIG trouble.
** Iomega is making very little money on drives sold to OEMs. (They
get their foot in the door, then hope to be able to lower costs
enough to make money on the signed deal). The DREAM TEAM (or
whatever) helps to lower costs of the drive enough to make these
deals eventually profitable.
If you keep things in perspective, and look at the numbers carefully,
you'll make money in this stock.
kp |
