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

To: Tom Carroll who wrote (47744)	2/13/1998 10:56:00 AM
From: Ken Pomaranski	Read Replies (1) \| Respond to of 58324

I disagree with you on a couple points, but I think (IMO) that these are the fatal ones. << Your argument amortizes the cost of the drive over the first CLIK! disk. That, of course, is ridiculous. >> Not at all! The camera or PDA manufacturer has to foot this bill. The factory cost of the unit goes up on this unit, therefore pricing it out of the intended low end market. There are TWO important costs to keep in mind here, and the distinction is VERY, VERY important. (1) Entry cost ---> footed by the manufacturer of the device (2) ongoing costs ---> footed by the consumer. ZIP has proved this argument already! Why do you think ZIPS are not included in sub $1000 PCs? Manufacturers just CANNOT afford to leave this money on the table. The cost of the ZIP is the entire profit margin!!! << By your reasoning, ZIP never should have sold at all >> WRONG! In most all cases, the ZIP drive cost is passed along to the consumer. And where the manufacturer can't afford it, he simply doesn't include the device (see above). So, let's now address the aftermarket CLIK! When thinking about this market, I can't figure out a scenario which doesn't end up cutting into ZIP sales. Probably the worst thing that could happen is that CLIK! comes out, shifting people from the high margin ZIPS to the lower cost (and much lower profit margin) CLIK! drives. Iomega competiting against itself! This WILL happen, by the way.. ZIP is currently at the lowest end of removable storage and it will get sales soaked from it from the aftermarket CLIK! << I'm not yet including CLIK! in my projections for the company, and you shouldn't either, positive or negative) >> So you're saying I should buy the stock on faith? Sorry, but I have to think about these things. I like to make money. I can project all I want. kp PS: Yes! I do understand the benefits of CLIK! It allows the user to keep a bunch of 'floppy's' around the house with all his pictures on them. What I'm saying is that the entry cost is high enough to keep Iomega out of 95% of the market: The disposable & $35 camera market. There is NO DOUBT in my mind that CLIK! will help the 10 people who will buy the $500 digital camera. kp