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Non-Tech : Any info about Iomega (IOM)?
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To: Rocky Reid who wrote (56092)6/14/1998 9:37:00 AM
From: Jock Hutchinson  Read Replies (1) of 58324
 
This puts Japan in a great advantage
price-wise when selling products in the
American market. It also makes American
products sold in Asia/Japan horribly
expensive.

Rocky: Your analysis of the yen's decline relative to the dollar is sophomoric at best. You must remember that both companies import their products from other SEA countries. Thus, the falling yen makes it more difficult for Sony to purchase labor and raw material overseas as compared to Iomega which pays in dollar denominated currency, leaving IOM with a distinct advantage in this very important area that accounts for a greater percentage of costs than any other product component. Moreover, if the margins on HiFi are razor thin, as you suggest, then the cheaper yen will not be that great an advantage since the majority of the value added to the product will be in the above manufacturing costs. Of course this is obviated in part by the fact that Sony is selling in large part to the USA, which means that Sony is taking the strong dollar and using it to buy more cheap labor than it could with the yen.

Where is the greatest currency loss? That's easy. Spending $100 million dollars to put Zip ads on CTA busses in Chicago that run through ghetto neighborhoods where the penetration of computer users is substantially below the national norm. Arguably, this ad campaign may qualify as the goofiest ad campaign of all time. It would be interesting to see if KE was locked at the knees with the various companies who were paid to launch the campaign. Time will tell.
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