Allen, just posted this over on TMF. Will copy it here for you and the rest of the thread. Mel
Subject: Re: CEO's 4-8 week announcement
Date: 3/9/99 9:03 PM
Author: WSProspector Number: of 18746
Hi Vin Ordinaire, I too spoke with Tyler today and was pleased with his overall tone, even though I expressed considerable frustration in watching the stock "halve" itself in just a matter of weeks. As usual he was very polite and mentioned that he had received quite a few calls expressing the same concern with the low stock price. I did ask about the continuing component shortfall and its effect on production of the Clik! drives and Zip 250s. This is being cleared up but I got the feeling that full production levels will still be delayed for a while. NEC is still planning to release the USB version of the Clik! in the near future and I got the impression that there will be some new Clik! improvements coming up later this year. Although Tyler could not say anything about the new Agfa Camera with built-in Clik! I think we are going to be pleased with what we hear about this camera before very long. As others have posted, the camera was demonstrated to a select few analysts and others in the last few weeks... but these folks were bound by non-disclosure agreements so we did not hear anything at the time, but the camera was shown and it works! I would make a bet that we see it demoed at the upcoming Shareholders meeting in Salt Lake City on April 21st.
I did mention that we have not seen much in the form of public relations releases from Iomega, and Tyler essentailly said that there was nothing to report... at this time. There is no need to push advertizing now when production of these new products was being held up by component shortages. When the time is right, there will be a big push by marketing. I also asked when Iomega was going to start to show the advantage of preparing for the Y2K problem through use of Zip and Jaz drives? Again, this will be part of their future marketing plan... when the time is right.
I brought up the fact that a lot of folks who buy new computers with Zip built-in don't know what the extra slot is really for and that Iomega should include a multi-media educational "show" for new Zip owners which would show how this and other Iomega products might be best used with their new computer. Best to put something like this on a CD ROM as it would be much cheaper to do than taking up space on a Zip disk. The new Zip owner does need to be educated about how to best use this product. Easy backup of files and data using Iomega software that is included with the drive. I have had to educate new owners about how the Zip can be very helpful in storing their stuff from the Internet along with digital photos from scanners, cameras, etc.
I also recommended that Iomega should consider including an incentive to buy a 10-pack of Zip disks with every OEM drive as this certainly couldn't hurt. Even if the 10-pack would be sold with a one time discount to the new owner.
Tyler did indicate that the Roy manufacturing facility would not be up to full production until later this year. As mentioned in the newspaper article, there will be a phased-in increase in the production workers to the final figure of about 450 new workers. I think that this new production line will be very flexible and will be used to modulate production of OEM Zip and Clik! drives to fit their new Virtual Model of "in time" production to fill in for any shortfall in the arrival of mass production from their Malaysian production lines. I agree that with the implementation of the "in time" production model that Iomega will be utilizing this to ship to the nearest region for sales and to cut the cost of shipping for a certain percentage of their product. I presume that Nomai would provide production to Europe, while the Asian markets would get theirs from the Malaysian factory. US will get the greatest share from overseas, but the critical needs of the OEMs would be supplemented by the new Roy manufacturing plant. I believe that Oracle software will prove to be a boon to Iomega in allowing this just-in-time virtual model to function well without building up high levels of inventory.
I am still contemplating attending the Iomega Shareholders Meeting in April. Tyler said that the Annual Report and Proxies will be mailed out to shareholders of record sometime next week. I have never been to such a meeting before so should find it interesting. New products will be displayed and questions will be taken from the audience as time permits. Even though it is an 11 hour drive from northern AZ, there should be a lot of interesting scenery to see along the way!
So, what lies ahead for us shareholders? Looks like there will be some continued erosion in the price downward until Iomega has some news to release to the public. But, remember, Iomega's Board of Directors has their eye on the competition and will respond as necessary. Just remember the effect of the release of the Zip 250 had on the Sony HiFud drive announcement... Was this just luck? I don't think so. Iomega makes mistakes just like any other company, but I think they are learning as they go along. The delay in getting out the USB Zip was certainly a wake up call for them!
Other factors to consider: Just what is the value of the Syquest intellectual property? How could this allow Iomega to leapfrog the rest of this sector? Does Iomega have a trump card just waiting for the Orb drive to make it to market (in any meaningful numbers)? Will there be any other OEMs embracing the Clik! system? Is it possible that we might see a doubling in the density of the Clik! media to 80 Megs? It is possible...
I just went up to the A T & T website and downloaded their newest music player for the new A2b music files. This new AT&T development gives much better quality music than MP3 files and it allows for many other things to be seen by the user, such as graphics for the album cover, lyrics, play time, etc. I was wondering if IOM is looking into these new internet music formats and I think I guessed right... they are, along with many other new and exciting internet product developments. The A2b music file can protect the copyright of the musician and record company as well. This could be very big for driving more and more Zip disk and Clik! disk sales in the future... maybe mid-2000 or so. Lets hope sooner.
I got the feeling that we are just in a quiet period regarding news from Iomega and we might not hear anything exciting for several weeks. I would bet that there will be some news by the Shareholders meeting though, so will just have to grit my teeth and hold on for a while longer.
I thank Tyler Thatcher for taking the time to listen to my suggestions and my frustrations in seeing the price of the stock just dwindle away. But that's the market now a days. Just look at the entire Disk Drive sector... we are not without company in these same feelings.
Hang in there friends, and try not to follow the stock every day... if you are in for the long term. Mel |
