Joel, regarding the issue of how cheaply Iomega is selling internal Zips to OEMs, you said, "You all could be right. But how do we know that I am wrong--i.e. that IOM is just selling them damn cheap to try to achieve the standard? Perhaps there are shades of truth to both sides. Please convince me."
I'm sure I can't convince you of anything, but I will point out a couple of things. One, KE has stated that Iomega will not sell drives at a loss. He has repeatedly stressed that the plan is to reduce costs and then reduce prices. He has also said that drives sold to OEMs will generate much less income per unit FOR THE DRIVES, but are expected to help generate the higher margin disk sales, which is where the real profit is anyway.
If you don't believe those of us who have more knowledge of and experience with the mail-order PC business, why don't you do some research and call Dell, Micron and Gateway. I'm sure they'll let you talk to someone who can explain why they would only subtract 25 bucks from the price of a computer for removing the Zip drive even though the drive costs them more than that. I'm suggesting this in all seriousness, since I believe you are basing your analysis of this particular issue on invalid assumptions.
And again, I wonder at your insistence that Micron is "giving away" Zip drives. I'll repeat a point I made in another post. The Zips are standard on the MMX systems, but they are no more "free" than the motherboards, memory, disk drives, keyboards, mice, cases and monitors that are also standard.
- Allen |
