Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Iomega Thread without Iomega -- Ignore unavailable to you. Want to Upgrade?

To: Ben Antanaitis who wrote (7056)	2/4/1999 1:14:00 PM
From: Ken Pomaranski	Read Replies (1) \| Respond to of 10072

<< left for the observer to answer, is this: Is IOM driving the DDX, or is the DDX driving IOM? Specific problem or endemic problem? >> My take: The answer lies in understanding the value chain. The companies that make money in the computer business are the companies that sell directly to the consumer. It's also important that these items have a high 'necessity' factor. The basic problem with Iomega's business model is that they are selling a 'non-necessary' item (luxury item) as a second tier supplier. They therefore have NO pricing power whatsoever. Iomega is at the whims of the OEMS. Unfortunately for Iomega, prices on PCs keep coming down, and this is the PRIMARY driver for the increase in PC units sold, and this fact also puts more pricing pressure on Iomega. The only product they sell directly to end customers are the disks. But as OEM use increases, you will get more and more people seeing the drive installed and wondering what the heck it's for! Logically, tie ratios will decrease over time as the OEM rate increases. Just some thoughts, kp