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

To: David Colvin who wrote (9195)	4/17/1999 12:13:00 PM
From: Mel Boreham	Respond to of 10072

David, thanks for catching that error. Yes, that would really be a drop from what they are now accomplishing. I was hoping for a bit more from the CC, but realize that it takes time for a new guy to come in to a company like Iomega and reorganize it, cut costs, and begin to show some effects in the bottom line figures. I do think it sounds like he is on the right track and we will see some interesting developments over the next few months. Let's see if the Clik! road show can educate the sales force and consumers on the potential of this product. Would sure be nice if the Agfa camera turns out to be a success as well. Long and holding, Mel

To: David Colvin who wrote (9195)	4/17/1999 2:38:00 PM
From: Ken Pomaranski	Read Replies (3) \| Respond to of 10072

A few more observations: First, I'm leaving my model intact for Q2, but I may have to change it for Q3/Q4 if ZIP250 takes off as much as management says it will. I'll wait and see what Q2 brings. Next, it is becoming apparent that ZIP will never replace the floppy. Floppy drives cost about $18 wholesale to a PC vendor. I don't see any way that the ZIP could be cost reduced that deeply. Iomega has admitted that OEM ZIP 100s have 'negative margins' (another term for 'losing money hand over fist') and this is when Dell sells them as an add-on for $79. The chance that a PC vendor will dump their $18 drive for something that costs more is ludicrous. I think the model will always be that ZIP will be an add-on peripheral to a PC. Like the Dell model. They will not be in low end boxes, or in the 'internet appliances'. They will be 'standard' in high end boxes (maybe! DVD may be better in these instead...) So I ask myself: How much is this franchise worth without 'replacing the floppy'? It all goes back to the bottom line: can they create a cash cow out of the ZIP line? What stops Dell from offering any number of peripherals for removable storage? Last note: Iomega made money this time because of the lowest R&D spending in 3 years. Advertising was almost nil. When they start the CLIK! 'hail mary', watch for expenses to rise again. (Hence the reserved outlook for Q2). kp