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Non-Tech : Iomega Thread without Iomega
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To: Ken Pomaranski who wrote (9352)4/22/1999 8:27:00 AM
From: David Colvin   of 10072
 
Ken,

FWIW, another "plausable" Clik! revenue guess from a poster on the Motely Fool web site:

boards.fool.com

How big could Clik sales possibly be? I saw some data on the digital camera market;
my recollection is that the '99 worldwide market was only 4MM units. So; Revenue =
Market size (4MM)x market growth (30%)x product price ($200 OEM) x annual
price decline (20%)x market penetration rate (15%). I used 15% because how many
$300 add ons can you sell with average camera prices at $300; also Clik is competing
against 4-5 other technologies.

If I'm right, this points to a $125MM business next year growing at 10% the
following year. If the PDA business is similar (I know nothing about PDAs), then its
a $250MM business growing at 10%. This gives IOM a spurt of growth, but then
they have to wait for the digital camera and/or PDA market to grow up. The market
penetration could be higher; but only if the price decline is steeper. Also the digital
camera market could grow faster; but this also implies rapid price declines in the
base product and , hence, the Clik.

Why get excited about Clik vs the 100MM unit PC market that Zip is competing for.
I've invested in companies before that had exciting new products for emerging
markets. I can tell you that it is much better to have exciting new technologies for
big/established markets.

V.
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