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To: Cogito who wrote (7404)	2/17/1999 12:57:00 PM
From: Ken Pomaranski	Read Replies (3) of 10072

<< They also know they can sell Zip drives as add-ons to increase their profit margins. >> This is true. But it is also true that they know they cannot include them as standard without negatively impacting profit margins. A company that needs to sell a computer at a particular price point will make LESS money on that computer by including a ZIP. See, you guys want it both ways here... If it's sold as an option, penetration is lower but margins are higher. If it's sold as standard, Iomega is squeezed by having to meet the floppy price point. Either model leads to trouble in the long run, and it all boils down to whether you believe that the razor blade model works. My question is: would you pay $10 billion for a floppy disk manufacturer?? kp

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