To: DR. IOMEGA who wrote (37918 ) 11/30/1997 11:01:00 PM From: Dale Stempson Respond to of 58324
Re: >>>It is estimated that the drive would need to sell at around $50 to be a real threat. We don't think that is possible.<<< For OEM inclusion, $50 would cause manufacturers to stand up and take notice. It certainly would be an incredible accomplishment if Sony was somehow able to compete in this price range. Something also to consider here is that box makers would get the added overall cost reduction benefit of not having to include a standard floppy. An additional drive bay would be eliminated or could be used for other purposes where space is at a premium, such as notebook PCs. These factors may allow Sony to spark some OEM interest even if their initial cost is a little higher than the Zip. However, given the apparent complexity of the Sony product and the related tech comments I've read thus far, for Sony to get even below $100 might be a stretch. Still, OEM pricing issues are probably irrelevant until such time as consumers start to demand HiFD. Additionally, inclusion by OEMs is known to take a significant amount of time even after the decision to offer a new drive is made. A long road of product introduction, ramp-up, quality issues, new competition, comparisons, evaluations, reviews and unknowns must first be addressed by Sony. Meanwhile, Iomega correctly has their primary focus directed at OEMs. Last quarter OEM Zip drives were up more than 60% over the previous quarter and represented just over 35% of total Zip drives shipped. This happened at the same time Zip drive unit volume increased 26% over the same period. These fantastic OEM sales didn't happen because the box makers decided to take a flyer on the Zip. They happened as a result of Iomega's deep penetration of the aftermarket which caused customers to demand Zip inclusion. This didn't happen overnight and Sony has a long way to go before they'll be able to match Iomega's success (if ever). Regards - Dale