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

To: Bearded One who wrote (40292)	12/17/1997 12:03:00 PM
From: Brent D. Beal	Read Replies (4) \| Respond to of 58324

Your point? You seem to be saying that since IOM won't be earning monopoly rents that they are therefore a bad investment. It seems to me that a lot of companies aren't earning monopoly rents and are doing just fine. Let's say IOM and Nomyidea square off head-to-head. Here's why I think IOM wins: 1) They make the drives. They can constantly make problems for Nomyidea. This is tantamount to the old analogy that Microsoft make the operating systems (the train tracks) that software runs on, so they have an advantage when it comes to software (the trains). I think that analogy applied even more in this case, since it appears that IOM can play some pretty nifty games with the drive that may cause new drive to reject the Nomyidea disks (see previous posts on this thread). 2) You seem to be implying that Nomyidea can make these disks for less than IOM--this doesn't make sense. Right now IOM has most of the market and there are economy of scales here, so if Nomyidea is making money on disks, then IOM is making more, which will be particularly true until Nomyidea sells enought disks to take away a significant part of the market, which may never happen (see #1) 3) Nomyidea is going to have to establish retail relationships with distributors that, after making a lot of money selling IOM producst, are going to have some loyalty to IOM, or in the very least, are not going to be too anxious to piss IOM off. Add to that the fact that retailers are not going to want to run the risk of selling disks that are not 100% compatible 100% of the time (even a 1% return rate would be a major headache that they will not want to deal with--see#1) and I believe that Nomyidea will have a very difficult time breaking into the market, particulary here in the U.S. This means that they will not realize the economies of scale that IOM will and therefore, if they make any money on the disks, IOM will be making more (see #2). 4) Namebrand products always sell at a premium. Again, therefore, if Nomyidea is making money on its disks, then IOM will make more. So explain to me again exactly what kink of threat Nomyidea is? And this is assuming that they actually manage to win about 10 legal battles in a row and manage to actually get they're disks on the market.