<< Sandisk just reported $.13 in earnings and a drop in revenue. Sandisk still trading at 6 times revenue. Ge, wonder whose expectations are higher, SNDK or IOM? >>
This reminds me of a key point. What make anyone think that Clik! can be the next ZIP if Sandisk (whos been doing this forever) isn't going through the roof? It's the exact same market, and one could argue that Sandisk is much better positioned.
Besides having a cool product, you MUST have a market for it. And the market must be big enough to matter. This is the big mistake made by the bulls. They assume that any product Iomega makes will significantly increase revenues. ZIP was an aberration, not the rule. (BUZ is an example of a more typical product).
Also, you are making the bad assumption that every new product Iomega makes will be incremental to revenues. Fact is, the removable storage market is finite in size, and Iomega already owns 85% of it, and still can barely make money. When they ship products in the same space, all they do is shift revenues from one product to another. What person needs both a 100 Mbyte ZIP and a 250Mbyte ZIP? No one. The bulls have to explain how having a 250Mbyte ZIP available will generate new business? Expecially since JAZ exists at the upper end... Carving a flat revenue base 2 or 4 ways make no difference.
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One more thing. I've gotten a TON of mail / posts calling me pompous, arrogant, a fool, etc.. But here is the fact: If I was a bull, and crucifying the bears in the same tone (which I did in the old Iomega days), I would be worshipped as a hero. That is an ABSOLUTE fact! I love it...
kp |
