Part 3 of 4
Zip and Increasing Returns
The Zip drive appears to be well beyond the initial stages of increasing returns. It
maintains a dominant position illustrated by a number of achievements:
- Zip had 96 percent share of high density floppy market in 1996 (IDC) - Over 10
millions Zip drives sold to date - Over one million Zip drives shipping monthly - All
top U.S. retailers carry Zip - Acceptance of Zip by major PC OEM's such as IBM,
Compaq, H-P, Packard Bell/NEC, Dell, Gateway 2000, Micron, Apple and others
- Zip included in over 100 OEM SKU's - Zip available as a bootable A: drive in
systems from OEM's such as Micron - Exclusive use of Zip in software such as
the Norton Zip Rescue module in Norton Utilities for Win95 3.0 - Complete line of
internal/external Zip drives, form factors, interfaces and accessories - Extensive
network of Zip manufacturing and marketing partnerships
These are significantly more than "small beginning events" on the way to
becoming the floppy replacement standard. These indicate that a potentially
insurmountable head start has been attained.
After addressing the increasing returns advantages to high technology
manufacturers, Waldrop comments, "Among high-tech customers, meanwhile,
there is an equally large reward to flocking to a standard."
The Zip drive presents just such a standard to which high-tech customers
apparently have flocked. As a MacWEEK reviewer wrote in an analysis of a
competitor's drive, "Unless [competitive drive] achieves success on the order of
the Zip drive, it won't be a good choice for sharing data with other offices." From
this reviewer's standpoint, Zip had already evidently achieved a standards
position for sharing files with another location.
The Problems of Playing Catch-Up to Zip
Even if another technology could duplicate Zip's exponential growth rate, it would
find itself falling further and further behind over time. A standards position in a
rapidly growing market is very difficult to overcome. The following chart illustrates
how the net difference in sales between a market leader and a following
competitor always gets bigger, even when the sales growth rate is the same for
both.Zip Drive the Floppy Replacement? Page 3
c CooperComm, Inc., 1997. 16457 Wilson Farm Chesterfield, MO 63005 (314) 537-1100 coopercomm @ aol.com
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