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Non-Tech : Iomega Thread without Iomega

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To: Ken Pomaranski who wrote (7406)	2/17/1999 1:11:00 PM
From: D.J.Smyth	Read Replies (1) of 10072

Ken, Rocky, or whoever you are <<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. >> Iomega has never been "squeezed", as you say, by any OEM to meet the floppy price point. Zip costs are constant; no OEM would expect Iomega to drop the price on Zip to the point where the inclusion price is less than the fixxed cost price. Such a scenario would bring disaster for both the OEM's inclusion and Iomega. The OEMs are aware that Iomega must also make a living. If an OEM includes zip as standard throughout, then the cost of that box is configured to include the zip as standard. Your statement is implying that Iomega MUST include the zip as standard in EVERY box in order to be successful - nothing is further from the truth. Iomega gets to 36 million zips by year end you won't see a $6 stock - the mathematics simply don't work that way. The current price has more to do with emotional despair than anything going on at Iomega and the box makers. And you are adept at playing against people's fears/emotions.

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