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

To: Steve Wiz who wrote (39743)	12/13/1997 5:56:00 PM
From: Frank Drumond	Read Replies (1) \| Respond to of 58324

The case for tie rates increasing. I didn't get a rise out of B.O. on this one but I do think it is worth further comment. Let's assume that Iomega keeps producing 1,000,000 Zip drives a month, but NEC and MKE? each hit a rate of 500,000 drives per month. This gives us total Zip production of 2,000,000 drives per month. Now let's assume that the current tie rate is 7 disks per Zip drive. Let's further assume that when production hits 2 mil/month that the tie rate drops to 5 disks per Zip drive. Iomega is still only producing 1,000,000 drives per month so the "effective tie rate" for Iomega is 10. The reason that this is important is that the disks have the delicious gross margin. So, this is how Iomega will see their gross margin increase even as their drive prices drop.