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

To: Ken Pomaranski who wrote (8986)	4/12/1999 11:50:00 PM
From: Cogito	Read Replies (1) \| Respond to of 10072

>>My guess is that Dell wants to make about $25 per drive sold. (33% profit margin..)<< Ken - I'd say that's probably not a good guess. I'd also say that your supposition that Iomega can't make an OEM Zip drive profitably for less than fifty bucks is also incorrect. Don't forget that while James Sierk has stated in the past that the company's margins for OEM Zips were negative, they were still making money on the OEM Zip business overall. (And just as a side point, the fact that OEM Zip drive margins have been negative in the past does NOT prove that "every OEM Zip drive is sold at a loss." Some OEM customers get better prices than others.) Furthermore, I believe that the fact that 40% of all Dell Dimension PCs (their most popular line) are sold with Zips indicates that your statements about the flagging demand for Zip are incorrect. OEM vs. retail percentages may have shifted, but if the overall number of drives sold continues to increase, how can you say that there is less demand? - Allen

To: Ken Pomaranski who wrote (8986)	4/13/1999 8:21:00 AM
From: Michael Coley	Read Replies (1) \| Respond to of 10072

RE: Price and Cost of OEM Drives. Ken, >> Therefore, I'd be willing to bet the Dell pays about $47 per ZIP drive to Iomega. << Interesting numbers that you've come up with for OEM drives. I actually have some very similar numbers in my model. My best guess in my model is that in Q4 Iomega received about $50 per OEM drive and that their costs were $47.50. I could be off on my numbers, but I think it's very reasonable to assume that Iomega is selling OEM drives within a few percent of cost. - Michael Coley - bible-reading.com

To: Ken Pomaranski who wrote (8986)	4/13/1999 9:43:00 AM
From: John Solder	Read Replies (2) \| Respond to of 10072

(Sorry, but I got tired of the tirade of posts against the bears today with no supporting data..) My point in this whole discussion is to make the bears support their assertion that "every single one of those OEM Zip drives sold at a loss to Dell" We are talking about the new Zip 250 drives. Not the old 100's. Plainly, it is not known exactly what price Dell is paying for the drives. We know what the consumer pays. Therefore the statement that "every single one of those..." is a false and misleading lie. This may seem semantical, but in reality is intentional deception and misrepresentation of fact. Not every bear is guilty of this offense, some bulls are as well. I don't think those types of statements are made unintentionally, they are intentionally meant to deceive. Don't whine about bears being ganged up on with no supporting data, the entire bear premise has no supporting data. I maintain that Dell moving potentially positive margin Zip 250s, in volume, is great news to IOM shareholders. Some of the best news in a while. It's the rabid bears that try to shoot down positive news with misleading statements of the type we are discussing here.