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

To: Rocky Reid who wrote (57289)	7/17/1998 9:55:00 PM
From: M.F.	Respond to of 58324

>>>My point is still valid, however. Zip drive unit sales up 35%, disk sales up 44%. This does not indicate declining tie ratios.<< All along I thought it was Iomega's contention that the tie ratios are defined as the total amount of discs sold for all Zip drives existing in the world, regardless of any time constraint. Now, it seems the definition has been modified to mean the number of Zip discs sold compared to the number of drives sold in a given Quarter, completely ignoring the installed base. This doesn't tell you anything about how well Zip disc units are moving compared to the installed base. This is why I question that Zip disc units are only up 44% when the installed base of Zip drives is up 114% since June 31. 1997.< Rocky, There is a possibility that both you and Allen have valid points. First, you have to understand that there are actually two tie ratios of significance. The first is the tie ratio for new drive purchasers, and the second is the tie ratio for those who have had their drives for a while. If we assume that the tie ratio for new drive purchasers stays relatively constant, probably somewhere between 5-10 disks per drive, then any increase in disk unit sales beyond the increase in drive unit sales must suggest that additional disks are being purchased by people who have already owned their drives for a while. This suggests that the reality is somewhat different than what Ken Pomeransky suggests, since it shows that some people are purchasing additional disks after their initial purchase. On the other hand, the Zip drive - disk is not exactly a razor and blades scenario either. In the razor and blades scenario, the blades frequently get used up and have to be replaced. The zip disks, with their much larger capacity than the 1.44 floppy, can be reused many times before they are filled, so the average user might never have to purchase another set of 10 disks after the first one. One of the nice things about the Clik drive and disk, particularly where it will be used for digital photography, is that it will be far more of a razor and blades situation than the zip is. Many people who take their digital photographs will use the Clik disk as people currently use negatives. As the original source for prints, slides, or computer images. Although it might appear to be less expensive to just have the number of Clik disks that you would use in a single photography session, and dump all of those images to inexpensive hard disk space later, most people will not invest in the additional hard disk space that will have to be adequately backed up to provide the same safety of the images. Imagine the comparison between losing a single Clik disk full of images if it goes bad, and losing 100 times as many images if a hard disk goes bad. The Clik drive and disk will end up being very close to a true razors and blades situation for the digital photography uses.

To: Rocky Reid who wrote (57289)	7/17/1998 10:16:00 PM
From: Cogito	Read Replies (1) \| Respond to of 58324

>>All along I thought it was Iomega's contention that the tie ratios are defined as the total amount of discs sold for all Zip drives existing in the world, regardless of any time constraint. Now, it seems the definition has been modified to mean the number of Zip discs sold compared to the number of drives sold in a given Quarter, completely ignoring the installed base. This doesn't tell you anything about how well Zip disc units are moving compared to the installed base.<< Rocky - No, the definition hasn't changed. I think the reason you're getting the wrong answer from your equation is that you are setting up the problem wrong. Try putting it on a graph. Draw a line representing drive sales increasing at 35% per year. Now draw another line representing disk sales, but peg it at a steeper angle for 44%. I know that doesn't reflect reality, because no growth line is ever completely linear. There are always times of lesser or greater growth. But it will illustrate the point I'm trying to make. As our new and quite eloquent friend M.F. pointed out, if each new user buys an average of five disks in the first year, then an average of only one or two disks in successive years, the overall tie ratio will go up over time. If each new user buys no more disks after the first year, then the tie average will stay the same. But if the tie average were staying the same, then disk unit sales would not increase faster than drive unit sales. - Allen