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

To: Jeff Hayden who wrote (50613)	3/18/1998 12:38:00 PM
From: Bill Lin	Read Replies (4) \| Respond to of 58324

IOM in the drivers seat: They have the cash, they have the manufacturing capacity, they have a great potential market. The problem is that management cannot figure out the 20% gross margin model. For example: KE thought that Q4 sales would perpetuate for fy 98. there, he had 33% gross margin. So thinking out 2.2 billion in sales, he had gross margin of about $720 million to play with. If you go ahead and give the shareholders $0.60 or $168mm and 35% to uncle sam $252mm, you have $300 million to play SGA with. Thats where he got the $100mm ad campaign. OOPs! So now he knows that he has a product substitution problem. The solution? LOW PRICE! I know that I would buy another 1 gig block if the price were $59. But to spend $119? hey, i'd rather buy a 2 gig hard drive. No one can compete with IOM if they produce low price and plenty of products. Forget about convincing people HOW to use it. Its cheap so they will buy it and figure it out themselves how to use it. 70 million users will be more creative than the IOM marketing dept. JMO BL

To: Jeff Hayden who wrote (50613)	3/18/1998 12:42:00 PM
From: Bill Lin	Read Replies (3) \| Respond to of 58324

The Ford Taurus model: Ford's trick with the Taurus in the past has been to price the product so that it matches the production capacity. It keeps the production at an efficient rate, so it can offer a competitively priced product. When the new taurus was introduced, it was offered at a premium price. But the features did not warrant it. So sales quickly sagged. ONLY when price was lowered, did customers come back. IOM has 20mm zip drive capacity. They need to lower price to sell 20mm drives. Maybe 16 million drives in next 9 months. possible? certainly. solution? low prices. BL