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Non-Tech : Iomega Thread without Iomega
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To: Ken Pomaranski who wrote (8986)4/12/1999 11:50:00 PM
From: Cogito  Read Replies (1) of 10072
 
>>My guess is that Dell wants to make about $25 per drive sold. (33% profit margin..)<<

Ken -

I'd say that's probably not a good guess. I'd also say that your supposition that Iomega can't make an OEM Zip drive profitably for less than fifty bucks is also incorrect.

Don't forget that while James Sierk has stated in the past that the company's margins for OEM Zips were negative, they were still making money on the OEM Zip business overall.

(And just as a side point, the fact that OEM Zip drive margins have been negative in the past does NOT prove that "every OEM Zip drive is sold at a loss." Some OEM customers get better prices than others.)

Furthermore, I believe that the fact that 40% of all Dell Dimension PCs (their most popular line) are sold with Zips indicates that your statements about the flagging demand for Zip are incorrect. OEM vs. retail percentages may have shifted, but if the overall number of drives sold continues to increase, how can you say that there is less demand?
- Allen
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