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To: Ken Pomaranski who wrote (7403)	2/17/1999 12:49:00 PM
From: D.J.Smyth	Read Replies (1) of 10072

Ken your comments have been debated for two years and during that time IOM has sold 24 million zips. Okay, keep debating. The analysis also does not discuss Pentium III and Y2K. Pentium III will create increased demand for higher end PCs in its own right. Y2K...what more can be said about this that already hasn't been said. The closer we come to 2000, the greater the need people will have in backing up data (as expressed in purchases). People tend to leave things to the last minute, so an expected pick-up in demand will continue throughout this year. the sale of a zip to a box adds "value" to the box, and thus OEMs have tended to increase the price of these higher end models beyond the relative cost of the zip itself (i.e., the zip costs $60 to the OEM, yet the incremental rise in the price to the box approximates $150 to $200 for most box makers other than Dell - without the zip they don't get the incremental rise - Dell sells the zip as an add-on for $99). OEMs would prefer to sell the higher end, high margined zipped models than the lower end low margin non-zipped models. the bottom line is increasing the revenue and the margins, and zip assists in the process at the higher end.

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