Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : The New Iomega '2000' Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Reseller who wrote (1524)	7/8/1999 5:16:00 AM
From: Reseller	Respond to of 5023

Just a couple of more comments about Zip. The Oem's accounted for somewhere around 50% of Zip sales, and no doubt a goodly percentage were sold as an add on sale. With an OEM cost of around $35 to $40 dollars their profit could be 100% or more. Is there any wonder why they predominately display Zip as an option. At 1,500,000 unit sales per quarter the OEM's are potentially gaining $60,000,000 plus in additional profits ( they are well rewarded for selling Zip ). Dell's net income last quarter was 434 million, could they have sold half of the Oem drives last quarter, if so IOM contributed 6% of Dell's bottom line and that's not factoring any disk or accessory sales. Zip to the online guys are incentive sales but the retail guys have to price them into their costs and still be competitive, they are more resistive to including Zip. This is where what Ken was alluding to is correct. Where I disagree is that in my view Clik! in a camera is a premium item, giving incentive for the cause of sale, the competition is different, the solutions are different, and so are it's strengths and costs. They are not the same as Smart Media / Compact Flash. Back to Zip, The hurtle in making Zip more standard will be overcome as more pressure is applied causing more Zips to be included in the retail boxes, retail can only eliminate the price advantage the online guys have by making Zip a standard item and force the online guys to do the same and or to invade the online turf which will continue promote the acceptance of Zip by getting that extra $79.00 sale. To clarify my customer story in my last post, This customer was a first time buyer, didn't even know what memory was or anything about computers but, knew what Zip was. Now she may or may not use Zip but it kind of shows just how commonly accepted it is.