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Non-Tech : Any info about Iomega (IOM)? -- Ignore unavailable to you. Want to Upgrade?

To: steve goff who wrote (35036)	11/11/1997 8:16:00 AM
From: Teddy	Read Replies (2) \| Respond to of 58324

Syjunk from the Wall Street Urinal: (bold added by me to help Rocky understand) Syquest Tech Hopes New Pdt Will Help Spark Turnaround By Christopher Grimes NEW YORK (Dow Jones)--Only a year ago, Syquest Technology Inc. (SYQT) was scrambling to prevent being delisted by the Nasdaq Stock Market. Bleeding cash and getting clobbered by Iomega Corp. (IOM) in the portable disk drive market, analysts saw buzzards circling Syquest's Fremont, Calif., headquarters. The company's new management averted the delisting by making several trips to the private market; in total, Syquest raised about $170 million through private financing. The cash provided a tourniquet, but the struggling company still needed some products that would turn it around. Now, analysts are giving 14-year-old Syquest some cautious praise, and not only because the company has survived against the odds. They say Syquest is about to deliver its first well-positioned product since Iomega began its flawless execution in this market in 1995. Called the SparQ, the company's 1 gigabyte hard drive is inexpensive at $199, compared with $399 for the Jaz, Iomega's 1 gigabyte offering, which operates in roughly the same market. SparQ's cartridges, which hold an additional gigabyte, cost $33 each, compared with Iomega's $99 cartridges. "I think they've done a very good job at establishing credibility and saving the company from near-certain bankruptcy," said Howard Rosencrans, an analyst at H.D. Brous & Co. The SparQ is expected to be shipped out to stores by the start of the Comdex computer conference in Las Vegas, which begins Nov. 17. Syquest is spending $16 million to advertise the device in the December quarter alone, company officials said. Syquest is positioning SparQ to compete in a different segment of the portable disk drive market than some of Iomega's offerings. This is a point that the company is working hard to get across, since Syquest's previous attempts to compete directly against Iomega resulted in disaster. The SparQ is a hard drive, while Iomega's Zip opreate more like a portable floppy drive. And Iomega's Jaz products are more expensive and target high-end users. "It was an entirely different Syquest before," said Fara Yale, an analyst at Dataquest. "Now they've got products that stand on their own. The mistake Syquest made before was they tried to go head to head with Iomega." Another thing Syquest officials are trying to get across is that they've learned the importance of marketing - an area where Iomega has excelled. "The key is we're structuring this business as much more of a marketing-oriented business instead of focusing solely on technology," said Ed Marinaro, Syquest's chairman, in an interview with Dow Jones. The company expects to spend between $20 million and $25 million on advertising next year, officials said. Syquest is entering the market with a low-priced hard drive just as sales of PCs costing less than $1,000 are taking off. Ed Harper, Syquest's chief executive, said that because the sub-$1,000 computers tend to have less hard drive space, he expects strong demand for the SparQ as an upgrade. "As the price of PCs drops lower, it fits in perfectly with Syquest's strategy," Harper said. Harper said he sees the removable storage market growing at a compounded rate of 47% over the next three years to a $1.5 billion market. But he projects the market to ultimately grow to about $8 billion to $10 billion annually if the idea of using the portable drives as upgrades takes off. With the rise of memory-eating applications like video downloads from the Internet, the upgrade market will increase, he said. "The upgrade market for us really is for those people who have run out of space on their hard disk," Harper said. The company won't project how soon it will turn a profit, however. But Brous' Rosencrans, the only analyst with a rating on the company's stock, has reversed his short position on the stock and has upgraded it to a "speculative trading buy." Rosencrans does not have a published estimate, but he said it was unrealistic to expect the company to become profitable before the second fiscal quarter ending in March 1998. Syquest reported a net loss of 54 cents a share in its fiscal fourth quarter, ended in September, compared with a loss of $1.29 a year ago. Rosencrans and Dataquest's Yale agree with Syquest officials that the portable storage business should be large enough to support two players. "I think there's room for two teams," Rosencrans said. "(Syquest) has laid out a very aggressive schedule on marketing, so I think it's going to be quite a shindig." - By Christopher Grimes; 201-938-5253