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Technology Stocks : SYQUEST -- Ignore unavailable to you. Want to Upgrade?

To: Dale Stempson who wrote (5422)	2/6/1998 10:57:00 AM
From: Michael Coley	Read Replies (2) \| Respond to of 7685

RE: Are SyQuest Sales Increasing? To comprehend the difference between Iomega and SyQuest and to get a handle of sales growth for each, I would recommend looking at the drive or cartridge milestones that each report. Iomega reports Zip drives sold. They sold under 1 million in 1995, over 3 million in 1996, and about 7 million in 1997. As of middle January, they crossed the 12 million Zip drive milestone. They haven't reported cartridge sales since 1995 when they announced 1 million Zip drives and about 10 million Zip cartridges. The tie rates may have dropped since then, but I believe them to be somewhere in the 8-10 range. Fourth Quarter, they sold about 3 million Zip drives, and I would suspect somewhere between 25 and 30 million Zip cartridges. Going into 1998, they have capacity to produce 20 million drives and have budgeted for $200 million in capital expenditures (presumably to expand capacity even further). Additionally, they have licensees ramping up production on Zip drives. SyQuest reports total cartridges sold (all lines, since the beginning of the company). They recently crossed the 17 million cartridge milestone. It would take some digging through press releases to find out, but it seems like they were at the 16 million cartridge milestone for 6-8 months. They used to report drives, but they quit somewhere around a year ago when it was somewhere around 3 million drives and 14 million. (This is from memory--it would be a good exercise for someone to research these numbers.) A few observations that I make from this: * Zip has a higher tie rate than SyQuest's drives. This makes sense since Zip cartridges are the cheapest. Jaz probably has a lower tie rate than SyQuest or Zip. * Iomega sold more cartridges in the last quarter than SyQuest has sold in their entire existence. * SyQuest cartridge milestones don't seem to be coming any quicker. To me, that puts into question the assumptions that sales are really taking off. * Iomega has seen massive increases in drive and cartridge sales, and are ramping up for even bigger increases this year. Please don't take my word (or anyone here's word) on it. Do your own research. The numbers are out there for all to see. - Michael Coley - wwol.com