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

To: Rocky Reid who wrote (39825)	12/14/1997 2:20:00 PM
From: Gottfried	Respond to of 58324

Rocky, (re discussion of backward compatibility) you said... >Ahem...for awhile, computers shipped WITH BOTH drives [3.5 and 5 1/4] to make sure that compatibility was present. That's what I expect to happen for a few years as ZIP increases penetration. After all, a 3 1/2 inch floppy costs OEMs only about $15 now, less than 2% of the retail price of even a $1000 computer. GM

To: Rocky Reid who wrote (39825)	12/14/1997 2:26:00 PM
From: jwk	Read Replies (1) \| Respond to of 58324

When The Rock Speaks .... To: Joel Sternberg (17808 ) From: Rocky Reid Monday, Mar 10 1997 12:22PM EST Reply # of 39826 Well, it is about 12:20 pm, and IOM is down 1/2 to 14 3/4 while the Dow is UP ~30, and the Nasdaq UP ~8. IOM has much more room to fall. All of my arguments may seemingly be dismissed by the longs here, but for some reason, the share price just keeps going lower and lower. Who is offering better advice? A CEO that loves to hype his own stock so he can dump it like last summer, or a small investor like me who can see a bad situation when he sees it? To: Allen Murdock (17817 ) From: Rocky Reid Monday, Mar 10 1997 3:09PM EST Reply # of 39827 >> Ready Office models 1710-1715-1720 all three come with 100 mg. Zip installed.<< Herb - >> Thanks for posting that. I'm sure it's just another indication of how demand for Zip is decreasing. ;-)<< And how the demand for IOM stock is decreasing. At about 2:40 PM, someone unloaded at 14 1/2. Pretty ugly day for IOM. Wayne Van Scoyoc (17829 ) From: Rocky Reid Monday, Mar 10 1997 7:04PM EST Reply # of 39827 There is very strong resistance at $15.00. We all know that your firm began shorting IOM at around $25.00. The only "squeeze" I see is your firm trying to greedily "squeeze" just one more nickel out of this one. I think your firm's greed on this one is unjustified especially with solid resistance at $15.00 staring you directly in the face and knowing that more than 10 major OEMs are packing their machines with IOM products, increased Malaysian productivity, Malaysian tax incentives and so on. I honestly think your short dollars would be better parked in a company with a hundred plus P/E at this point. Regardless of your description of major short selling occurring now and on any rise in price, it certainly is not reflected in the daily volume numbers I look at. The IOM volume is very very low, which is what happens when a stock forms a base. The $15 base could last 1 day or last 3 or 4 weeks, but that is what is happening. IOM may spike down significantly intraday, but it will always close closer to $15.<< Since when is volume of almost 2,000,000 shares low? Future IOM earnings conjecture is NOT money in the bank. They are a guess. They are no more valid than my claims that CD-Rewrite will eclipse Zip's claim as successor to the 1.44 MB Floppy. This is my analysis, and I think it is valid. There are arguments others presented over why CD won't succeed. One of these was speed. This hasn't stopped CD-ROM from becoming the standard in software distribution. Nor from it becoming the primary game playing medium. The Cost of Manufacturing CD's and CD-Rewrites is CONSIDERABLY less expensive than Zips or EZ_Flyers. Right now, a bulk purchase of a 640MB Write-Once CD is $5.75, and dropping. When CD-Rewrite comes out, it will certainly cut into IOM's sales whether they be Jaz, Zip, or Ditto. A 640MB Rewritable CD will not be proprietary like Iomega's stuff, and therefore it will be adapted very quickly. Remember, that CD-Roms are standard equipment on virtually ALL computers sold these days. The upgrade from CD-Rom to CD-Rewrite will seemingly be a natural progression. From a supply-side argument ALONE I can make the case for CD's over Zips. The COGS will be less, and the margins HIGHER for CD's. Iomega had a great 2 year run. But all good things must come to an end.

To: Rocky Reid who wrote (39825)	12/14/1997 8:13:00 PM
From: Dale Stempson	Read Replies (5) \| Respond to of 58324

Re: Zip sales & the 4th quarter Rocky, you posted: >>>Iomega has had more than 2 years to try and make Zip standard. With its low installed base percentage and low OEM inclusion, it has failed. <snip> The sad fact is that Zip sales have leveled out.<<< This prompted me to review the last IOM CC. Before I comment, here's a brief summary of Zip related factors impacting sales for the 4th quarter: ______________________________ * Zip unit volume was up 26% over the 2nd qtr * OEM Zips were up more than 60% over the 2nd qtr * OEM Zips represented over 35% of total Zips shipped * OEM Zips represented most of the overall unit increase * ZipPlus and notebook Zips are shipping in the 4th qtr * 3rd qtr sales were a record 432 million * Shipping ATAPI to OEMs has freed up IDE chip constraints * Quality problem causing Zip shutdown is solved * 3rd qtr Zip margins improved due to higher disk volumes * 3rd qtr Zip margins improved due to lower drive costs * IOM committed to achiving external Zip retail of $99 * 3rd qtr backlog grew to a record 379 million * Retail backlog grew proportionately larger * Record number of Zips shipped in Sept * Production level increased from Sept entering 4th qtr * 4th quarter started with continued strong sell-through * A lot of Zips shipped in Sept haven't gone to revenue yet ______________________________ I believe Iomega is doing a good job of keeping to KE's orginal plan. With an installed base of over 10 million and the $99 price point pretty much achieved, manufacturing efficiencies will now support the cost and volume needs of the OEMs. Customers are demanding Zips pre-installed in their new machines. This is clear due to the tremendous increases in Zip sales to OEMs. While this transition from retail to OEM impacts Iomega in a number of ways, it is exactly what should be happening at this point in time. OEM's needed to see high demand and low costs and today they have both. As far as the 4th qtr is concerned, I'm expecting great things.(FWIW, my second buy limit finally hit on Friday and IOM is now my largest single holding. I'm going for it big time with an average cost basis now at $27 a share). Expounding on the some key points from the factors listed above: 1) Sales last quarter were impacted by the line shutdowns which cost Iomega somewhere betweed $50 and $100 million in revenues. This is not likely to repeat. For discussion purposes, I'll estimate 3rd quarter sales should have been $500 million. It should be pointed out that the shutdowns were due to component qualtiy problems which have been resolved and not due to availablity problems. 2) Chip availability was a problem. Transition of OEMs to ATAPI (now in volume manufacturing) will minimize chip requirements because ATAPI does not use the "problem" chip. In addition, Iomega has two suppliers for the chip. 3) The removal of MAP pricing has allowed retailers to finally sell Zips at the $99 price point. This by itself could generate huge sales as this was the sweet spot that marketing had targeted for the past two years. Also, the reduction in retail prices was not the result of changes to what Iomega sells the drives for which is great for margins in a quarter where manufacturing costs are dropping due to volume efficiencies. 4) The Holiday quarter is normally the best quarter of the year with new products and accessories are readily available. 5) Both sales and production during the last month of last quarter (Sept) were at record levels and were continuing into the 4th quarter. Because of Iomega's revenue recognition policy, much of these sales will be reported during the 4th quarter. 6) Competition at this time is virtually non-existent. The only really new product out there is the SparQ and with a maximum total of only 50K units being made available by Syquest this quarter, few will be able to find one even if they wanted one. (BTW, it's interesting to me how some are excited about the SparQ being "sold out" when retail outlets are only receiving a handfull to sell in the first place.) While these points have been discussed before, I thought they were worth reviewing as we approach the earnings release date. IMO, never before have we had the potential for such a huge quarter. Regards - Dale