Any info about Iomega (IOM)? Message Board

STOCKTALK

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 Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Jeff Hayden who wrote (50599)	3/18/1998 11:57:00 AM
From: Bill Lin	Read Replies (3) of 58324

Rocky is right in a couple of points: iom products are too expensive. Advertising campaign was dumb. price points on hard disk drives are falling to $30/Gig (Quantum bigfoot 6/12 gig) to $50/Gig. price points for 1 gig drives have been seen at $89 to $109. price point for jaz is $249 to $275 (internal). price point for jaz disk is $75 to $112 (5 pack to single) price point for zip is $75 to $199 (ide internal to plus) price point for zip disk is $8 to $12 (gig block on sale and single disk) The point is: iomega products are too expensive. I as a consumer will buy the alternative 12 gig hard drive for $370 instead of paying $387 for a jaz drive and a disk. Its a 12:1 cost ratio. A more reasonable ratio would be 3:1 or 4:1. They need to bring jaz 1 prices down to $159 for drive, and $50 for cartridges. jaz 2 drive to $239 and jaz 2 cartridges at $99. zip drive to $49 and zip cartridges to $4.99. Then they need to plan for a price reduction to $30/gig for next year. As for advertising: they should send Bill gates a coupon for 10 million free zip disks for inclusion into win98 software distribution. Kim Edwards thought he could PULL zip and jaz sales thru increased advertising, while remaining at the high point of the price/value curve. This points to the intrinsic belief that IOM products provide such a high value to the customer that he is willing to pay up for the benefits (a value destroyed by the product substitution theory). However, the strength of Walmart, and other discount retailers point to the consumer's willingness to demand high quality at low prices. Now KE has bloated inventory levels, and a high cost overhead structure. Just like Compaq did when Pfieffer took over, he needs to redirect to a low cost strategy. To sell 20 million zip drives A YEAR when there are 200 million users and 100 million computers sold world wide is pitiful and currently unattainable. TEAC sells 70 million 3.5" drives per year. They cost $19. Thats $1.4 billion in retail revenue. If IOM sells 20 million zip drives at $50, thats $1 billion in retail revenue. Trust the razor blade model. Let the hardware go cheap and make the money on the disks. Drive prices lower like crazy. Advertising for IOM for zip is a waste of money. It already has word of mouth and enough presence to be the NEXT floppy standard. What it doesn't have is a competitive price. Anytime a technology company votes for premium pricing instead of low cost competition is a time to start pulling back. Why? because IF technology is the next wave and IF it is just beginning, then some team will produce a cheaper, faster, easier product to take the premium away. IOM is a winner IF they become a low cost producer of zip and jaz products. BL ps their competition is not sparq, but HDD industry (substitution product)

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next