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

To: Gottfried who wrote (8973)	4/12/1999 2:54:00 PM
From: s. bateh	Respond to of 10072

and ohhh those sweet high margin zip250 disks....lets not forget them with dell!!!!!

To: Gottfried who wrote (8973)	4/12/1999 2:57:00 PM
From: Rocky Reid	Respond to of 10072

>> While I know the company acknowledged lower profit margin on OEM ZIP, I don't recall they admitted to a loss.<< Iomega Management has stated numerous times in Conference Calls and TV Interviews on CNBC in that they sell their OEM Zip drive at a "Negative Gross Margin." This means a LOSS. Just check out the IOM Conference Call transcripts from 2nd Q 98 up until the latest one. Key words: "Negative Gross Margin." Iomega then tries to qualify this sad situation by offering the lame excuse that they start making a profit with disk sales. Note that this is the exact same tactic Syquest tried with SparQ (and Iomaniacs derided it). I find it funny that some Iomaniacs now reverse their negative opinions on this strategy when Iomega tries to do it.

To: Gottfried who wrote (8973)	4/12/1999 3:21:00 PM
From: Rocky Reid	Read Replies (1) \| Respond to of 10072

The CNBC I referred to was on Oct 23, 98 during their first interview with brand new CEO Jodie Glore. Here is a post I contributed as the interview was being conducted: ------ Message 6133581 To: +Alan Rosen (2522 ) From: +Rocky Reid Friday, Oct 23 1998 9:59AM ET Reply #2523 of 8979 According to CNBC, Zip is only 3% of PC's. I am right once again. Also, OEM Zip drives selling at a "negative margin" = LOSS I am proud of CNBC. They are asking some of the tougher questions that the fluff piece over at TMF just didn't happen to get around asking. ---------

To: Gottfried who wrote (8973)	4/12/1999 7:49:00 PM
From: HRP	Read Replies (1) \| Respond to of 10072

<< ... Iomega made $159m on ZIP in '98 and $286m in '97. While I know the company acknowledged lower profit margin on OEM ZIP, I don't recall they admitted to a loss. If anyone has a reference for this, please post it. >> Gottfried, When Rocky made this claim months ago, I asked Tyler Hatcher if that was true. He E-Mailed me back that Iomega had previously acknowledged a small loss on each OEM 100 MB Zip drive. I have not saved the E-Mail. You may want to ask him again. Clearly it would be inappropriate to apply that statement to 250 MB Zip drives since pricing for those drives would have been separately negotiated. However, Rocky has a "point." If Dell can negotiate a no profit deal with Iomega for 100 MB drives, they have the power to negotiate a "good" deal (from their perspective) on 250 MB drives. If every person who buys a 250 MB drive as part of a Dell system would have bought the drive in the after market had the drive not been available from Dell - the deal with Dell is bad news not good! The question is how often will that happen? Iomega should have done a study on this issue in order to determine a price acceptable to them. Since Iomega hired two PHD statisticians several months ago, I assume the study was done. hrp