<< - how much is an installed base of over 10 million users worth? >>
Absolutely nothing. 0. not if most of these users already have a
half dozen disks or so. I'd be willing to bet ANYONE here that a
purchaser of a ZIP drive buys 90% of all the disks he's EVER going
to use within 1 month of the purchase of the drive.
These means that Iomega needs to KEEP SELLING DRIVES at a rapid
pace to keep selling disks.
Like I stated before, your 'dream model' is not reality. The 'dream
model' states that the purchaser of a ZIP drive buys a constant number
of disks per unit time while he owns the drive. In other words, the
longer someone has owned a ZIP drive, the more disks he is going to
have. This is NOT AT ALL true. Tie ratio is really a function of the 'type' of user. You need to catagorize the users as follows:
EARLY ADOPTERS = dozen disks, then stop
TECH HEADS = dozen disks, then stop
BUSINESS = more resembles the razor blade
AFTER MARKET = 6 disks, then stop
OEM 'JOE SIX PACK' = 1 disk, then stop.
Notice that with the above catagorization, Iomega would have experienced a HUGE tie ratio as ZIPs came out, then it would tail
off AND KEEP TAILING OFF as OEMs take hold.
My revenue/earnings models reflect this model. Not the razor blade model. It would scare the living daylights out of you if I posted the results of my model here...
kp
PS: My model may not be perfect, and has some guesses/assumptions, but it sure hasn't failed me yet. Remember, EVERY SINGLE ANALYST was wrong on this stock. Only Herb, Rock, and I have been correct. And you lambast all of us.. |
