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: Ken Pomaranski who wrote (8990)	4/12/1999 10:18:00 PM
From: Zakrosian	Respond to of 10072

Ken - I appreciate the effort you've put into making your case; am I correct in assuming that when you speculate that IOM's cost for producing a Zip drive has to be more than $47, that you are referring to the marginal cost and not the average cost?

To: Ken Pomaranski who wrote (8990)	4/13/1999 10:45:00 AM
From: Rocky Reid	Respond to of 10072

Ken, I just don't see the attraction to buying this stock when other stocks are raging upwards. My JBOH has gapped Up again today to $19 1/2 so far. Remember, I bought at $9 7/16 only 4 days ago. And EGRP is Up another $40 or so. Same with AMTD. There are so many opportunities to make $$$ in this market, it's silly. Momentum Momtentum Momtentum. Why park one's money here in IOM Snoozeville?

To: Ken Pomaranski who wrote (8990)	4/15/1999 3:53:00 PM
From: Dale Stempson	Read Replies (2) \| Respond to of 10072

Ken, you stated: >>> In any company, If the trend shows that product 'A' is dropping in product mix with respect to product 'B', then management and shareholders should be concerned. Iomega (and the bulls) try to fool you by trying to make unit sales matter. They do NOT. If the units are mainly product 'B', it is immaterial AND deceiving. I laugh when you on the thread get excited over OEM percentages & unit sales. High OEM percentages (like 40% dell) mean more money lost, or not gained by having Iomega not sell the drives in the aftermarket. <<< Hmmm, let's take a look at this: (Ref: '97 vs '98 stats from Coley. Thanks Michael) * Retail Zip units dropped 12% (down .6 to 4.3 million) * OEM Zip units increased 149% (up 3.1 to 5.2 million) * Total Zip units increased 37% (up 2.5 to 9.5 million) * Total disk units increased 40% (up 16 to 56 million) So the question is: Why might one get "excited" with these unit sales and percentages? Well, here's my opinion: 1) Zip unit sales are growing at 37%, a faster rate than overall PC sales. This indicates Zip is moving from from the disk drive add-on and power-user market to the general storage market. 2) Zip is expanding market penetration due to the OEM focus, increasing PC inclusion from 4.0% to 7.5%. This indicates success at lowering OEM costs and improving volume delivery. 3) Due to the current installed base and as unit sales continue to increase, compatibility is becoming a more significant issue. Users will be less likely to purchase a competing product. 4) Cost reductions as a result of higher volume manufacturing allow for price reductions. Price reductions should further increase unit sales while making it all the more difficult for competitors to compete. 5) Unit growth is continuing to occur even when advertising has been decreased. This indicates improvement in the learning curve of users. I will add that most of the above does not mean much if Iomega fails to increase net profits. What is important is that the groundwork is being layed for the successful implementation of a plan to improve the bottom line. Significant and continuing increases in total unit sales are a critical element. IMO, this is potentially something worth getting "excited" about. Future success will of course require improvements in many areas, the most important being cost reductions. The Virtual Model, properly sizing the company, the Six Sigma Program, technology improvements and volume manufacturing benefits should all help Iomega management meet their goals. Without significant increases in unit sales volume, success would be extremely difficult. Regards - Dale