Any info about Iomega (IOM)? Message Board

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Non-Tech : Any info about Iomega (IOM)?

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To: Alan Rosen who wrote (56695)	6/21/1998 10:25:00 PM
From: Ken Pomaranski	Read Replies (2) of 58324

You guys still don't get it, do you? I honestly cannot believe it. The data is staring at you guys straight in the face and you still don't see it. IT'S OVER!!! The only thing left is the crying, which will happen soon enough. It's quite simple. I'll lay out the reasons, and I dare any bull to try to refute any of these statements. (1) The ZIP fad is over. Iomega will never make another dime off the ZIP drive. The reason is simple, and is spelled out by Iomega in plain english in their Edgar filings: (a) Aftermarket drive sales are declining rapidly. (b) Iomega has little (if any) margins on OEM drives. (c) Therefore, the only way they make money in the future off the ZIP is from disk sales. (2) Iomega as an OEM supplier is a losing business model. (I said this two years ago, and I still stand by it). Why? a. No pricing power. Since the ZIP drive is not required for operation of the computer, box makers can dictate the price they want to pay back to Iomega. The drive is basically a boat anchor, and adds factory cost to the box. No box maker is going to give away their margins. NO WAY. Believe me, I know this... b. Tie ratio for included disk drives will be much smaller than aftermarket drives. We are already seeing this. (3) Tie ratios (and profits!) will decline going forward, shooting a big hole in the 'razor blade' business model. a. no SW distribution. b. saturation. the 'power users' who bought the aftermarket drives in the beginning have enough disks. How many of you on this thread have recently bought disks? I'm still using my 10 or so I bought 2 years ago. c. See (2) above d. No pricing power... See Naomi activities going on. (4) The company is losing BIG TIME money, with no stop in the forseeable future. They've already proven that they cannot make money off the ZIP. what's next? CLIK? By the time they get that sucker off the ground there may be nothing left of the company. So... The big question: WHAT CHANGE CAN SAVE THEM??? I see nothing. It can only get worse going forward as ZIP passes maturity and the ASP of PCs drops even more. (5) Restructuring, etc... This company is no better than Syquest. The same thing happened to them as is happenning to Iomega now. kp PS: Hey Jock! You owe me some cash or something... 4 1/2 occurred 10 months earlier than I expected.

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