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

To: MoonBrother who wrote (5766)	3/2/1998 10:52:00 PM
From: Michael Coley	Read Replies (2) \| Respond to of 7685

RE: Revenue per unit, Cartridges, Tie Rates. Historically, SyQuest has had a tie rate of around 4-5. This tends to drop for higher capacity drives and rise for lower capacity drives. Another rule of thumb seems to be that people will spend as much for cartridges as they do for the drive. This would indicate a tie rate of 6 for SparQ, 10 for Zip, 4 for Jaz, 4 for SyJet, and 6 for EZ230. These are just guesses. Nobody but SyQuest and Iomega really know for sure. How much do they really get for each drive and cartridge? I think it's less than you would guess. Last quarter, they had $6 million in revenue from SparQ. That was 40,000 drives and an unknown number of cartridges. They expected to ship 90,000 cartridges. If they shipped 80,000 cartridges, they received $150 for every drive and two cartridges. The retail price for it would be $266. That's about 60% of the retail that SyQuest is getting. I suspect that it's a little higher on drives and a little lower on cartridges. Just some rambling with no real conclusions... Hopefully you'll find some useful data to adjust your projections. I would expect 80-100,000 SparQ drives and 300,000 SparQ disks this quarter. That could generate $16-20 million in revenue. Add another $20 million for other products (which might not happen) and you're only up to $36-40 million. I think $40 million is the most you will see. - Michael Coley - wwol.com