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

To: Dan Woodbury who wrote (50595)	3/18/1998 11:01:00 AM
From: Dan Woodbury	Respond to of 58324

While I think Iomega could be an attractive buyout candidate, the easiest way for management to get the stock moving upwards again is to announce and execute a coorporate restructuring. That is one strategy which Wall Street seems to appreciate (witness Kodak). The other alternative is to bring in "Chainsaw" Al Dunlop. I'm sure he could get Iomega back in the black in no time... In his haste to grow the business, Ken Edwards has allowed expenses to get out of hand. Iomega is now in the precarious situation of deciding whether to spend more money on advertising and R&D or slashing costs. The risk of spending more money is that costs may continue to outstrip sales and the company spirals into the red. The risk of cutting expenses is that the company fails to innovate, fails to communicate its message to the public and product sales dry up. Step one for Iomega is to cleary define its product line and drop any non-core projects. Buzz, for example, is clearly a stupid product for Iomega to market. The company would do much better co-marketing with the leading video capture products and Microsoft's PictureIt than trying to push a product into a market for which it has little expertise. Obviously the Zip is Iomega. While Jazz and Ditto are decent products, cost and functionality will never allow them to be more than niche products. The crucial marketing question for Iomega is whether or not sales of Zip disks (and tie ratios) will exponentially increase as the price is reduced. Undoubtedly, prices will fall. If the current tie ratio is 5 for $10 disks will the tie ratio jump to 20 for $4 disks. If it will, then Iomega has a future. If not then Iomega will never be more than a low margin business. Lastly, I for one find the current advertising campaign to be a flop. I see no consistency either in the message or in the ad placements. The model for consistent advertising of a commodity product (which the storage market represents) is Dell Computer which, for the past umpteen years, has had its ads on the back cover of the major computer magazines. If I ever want to know what the price and components are for the newest Dell system all I have to do is look at the back cover of PC Magazine. That is a consistent and successfull ad.