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

To: Ken Pomaranski who wrote (3148)	10/14/1999 7:00:00 PM
From: D.J.Smyth	Read Replies (2) \| Respond to of 5023

Ken "By far the worse thing in the report is the falloff in ZIP disk sales. With about 10m drives added to the installed base since last year, disk shipments should have INCREASED. This blows the 'razor blade' theory out of the water..." you can view the razor blade theory from two different angles. one angle is increasing zip drives will yield increasing zip disk sales. the other is increasing zip drives will yield lower disk sales. so you're saying that regardless of the number of increasing zip drives, lower disk sales will continue to occur? Prove that on paper. It's not possible. Their profit on the disks is still there. that hasn't been going down. The positives about this report is that the start-up costs on the clik and zipcd units ($23 million) and the loss on the ditto unit will nearly disappear for the 4th qtr. You can't record the same start-up costs twice. Without these costs the Cost of Sales, SG&A and R&D costs will decrease. Surprising to see Jaz still bringing in $66 million. Clik at $5 million plus and the ZipCD at $8 million. the Zip CD is pure mumbo as the manufacturing costs are retained by Phillips - IOM's only real tangible costs are marketing. So, even with a 10% margin on the ZipCD, it is believable that going forward, IOM's marketing costs will never again exceed 10% of total ZipCD sales. And yes Ken, I can't wait for the 4th quarter. Just can't wait to see yours and Rocky's proverbial mugs grousing about how things really should be. See you at 34 million Zips Ken.