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Friday, November 08, 1996 Iomega was up $1 3/8 Thursday, closing at $25 3/8 (+5.73%). TODAY'S RECAP: What we reported yesterday as rumor we can confirm today as fact: Iomega does have plans to develop a new miniature storage disk, which they call "n.hand." This disk is designed for use in any of a number of hand-held computer electronic devices, from digital cameras to cellular phones. America Online members should check out the complete Iomega press release on n.hand at Keyword: Market News. We are devoting the whole of this morning's special two-part edition of I/T to the discussion of n.hand. Many of our resident heavyweights have offered their first impressions of this new device. Is it the wave of the future? Or just some future garage-sale junk? Put your ear to your monitor and listen to the conversation... REMINDER: Iomega moves to the New York Stock Exchange today. The ticker symbol is now "IOM," replacing the late, lamented "IOMG," now residing in some sort of ticker symbol Valhalla (or so goes our daydream). INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.) -- or use AOL's Edit>>Find in Top Window Feature. If Find in Top Window is dimmed, just click on some text, anything, in the IOM Today window and try again.
1++MF ETurkey offers his first thoughts of n.hand, in light of the speculation
that occurred in the folder before its announcement. And now, the Best of the Board...Started 3 a.m. 11/7/96.
1+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Stuff Date: 96-11-07 09:21:32 EST From: MF ETurkey
First: This device, fills two different storage areas that we have been talking about through the year: The digital camera market, and the games market. Both have big potential, and both will have big competition.
Second: We will not know how successful any such product will be until Christmas of next year, and will most likely get first indications sometimes around PC Expo in June as to how many companies are incorporating the new disk/drive. Competition will be fierce. You can bet Fuji Film is not going to roll over and play dead.
Third: With the popularity of inexpensive scanners, the addition of notebook computers this week, the addition of digital cameras and cell phones, we are watching the dawn of the Input Revolution (great phrase Benjamin). You gotta put that stuff somewhere.
Fourth: A down note. While the news is obviously terrific in that iomega is attacking the markets we have long recognized, the manner in which it came out reflects a problem. The company is leaking. Both ~Aparkesheb~ and ~cynicalguy~ both claimed to have the news in advance.
In the area of R&D for a technology company, where secrecy is important and competitors lurk around every corner in and in every doorway, this is a fundamental problem.
Last: <<<For example, a reporter could snap a photograph with an n.hand-equipped digital camera; use an n.hand disk to save and transport the image to an n.hand-equipped cell phone and then transmit the image to a news bureau, anywhere in the world.>>>
A couple weeks back, in discussing digital cameras, I made a comment almost identical to this one from the press release. Several photogs told me about the current state of the digital photography in response.
Nevertheless, it is a riot to actually see this in print after that discussion.
Eric 2+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: n.hand Handle? Date: 96-11-07 17:34:19 EST From: NOVWOO
Thanks for all the information, Bill.
C-guy: <<The entire world doesn't know the best fact about the N-hand. (actually, most don't even know it exists yet). And the fact that it fits N your hand isn't it.>>
I don't know about if it is a *fact* that "it fits N your hand". First of all, I am a total outsider. I am only a computer user and I am not in the computer field. Usually I just rely on the published information and do some research on my own. Then based on some engineering, financial, economic and marketing knowledge; keen observations, logical deductions and analytical abilities, I reach my own conclusions. Most of the time, they are the same as lots of other excellent posters' on this board. Other times, they may be a little bit different. And quite frequently, my conclusions could be wrong.
I have to agree with Bill here the best thing about n.hand is the "hand" part. I don't know about the *fact* part because I am not Bill. I am guesstimating here from the name "n.hand" alone. The name implies it probably will fit in your hand. So this new miniaturized Zip drive may be in the shape of a handle and may also function as a handle.
This drive handle may have a "standard" interface/adapter that could fit into the digital camera, cellular phone,...,etc that would be designed around the new n.hand technology. This same Iomega drive handle may fit different cameras, phones,...,etc., different *brands* of cameras, phones,...,etc. Pop out here, pop in there. Or, the miniaturized drive could be permanently integrated into the consumer device's body if the OEM (OEM here we go again) prefers to further miniaturization of its device. Do we get the picture now?
Let me close my eyes and imagine the brands: Motorola, HP, TI, Sony, Panasonic, Olympus, Casio, Kodak, Fuji, Canon,...that could use this Iomega "handle" (n.hand). Obviously, I am not saying all of them will. Maybe none of them will. On the other hand, I could miss some important names that will. We are talking about future development here and none of us know for sure what will happen. I could be seriously wrong.
But this news is just too exciting for me not to guess more than what has been released. The possibilities and implications are so numerous. I may continue in further posts. 3+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: n.hand left Date: 96-11-07 17:42:34 EST From: MF Ben
<<<Our analysis is one leg up. I'm sorry that Ben doesn't think this new mini-zip is a good idea. >>>
MF DrJimbo,
In my opinion, anything that Iomega can sell for a high gross margin and sell lots of is a good idea and one I'm ALL for. I AM skeptical of putting a rotating media in objects that have not used such storage devices before. That doesn't mean it can't be done, only that I am skeptical.
As someone noted, Iomega has only stated that they are developing the product. While I have great faith in IOM's R&D department, I also know that even the best R&D department is not infallible.
I do notice that, unlike the Jaz roll-out (very delayed due to problems), that Iomega is giving themselves a little more time with this one. Probably a good idea.
I have no doubt that the R&D on n.hand must be very complex and that the final product must be "bulletproof" in order to succeed. A product akin to Apple's 5300 will tarnish Iomega's image.
If they CAN make it -- on time -- and sell lots of it, I'm all for it.
<<< Iomega is also working on plans to make the new n.hand disk technology compatible with FUTURE versions of its Zip drive.>>> emphasis mine
Honestly, I'm MUCH more excited over the "diet" Zips due next year in two different flavors as I see a natural market for the product with little R&D downside -- as in problems.
IF Iomega can make a rotating media product stable, at all ANGLES (people hold cameras in many ways), under OUTDOOR conditions (including temperature and humidity conditions not found in many offices), STABLE (pims, cameras, etc get knocked about while in use), then I will be very impressed. While I DO understand that Iomega is NOT prone to hyping, I do believe that they can also underestimate -- as even the greatest companies can -- the R&D risks going forward.
Heck, Microsoft's Win95 was later than late and the Pentium calculation error is infamous. Jaz proved that even IOMG's vaunted R&D department isn't error proof and that many projects, especially extremely complex ones, DO encounter the unexpected.
I'll give them the benefit of the doubt and say they CAN engineer pretty much on schedule. Personally, I like some of the other markets MUCH more than digital photography.
-- Digital cameras: I've discussed this and believe that digital still cameras will evolve and be merged into digital video capture. the 4fps of a digital still camera and the 15 fps of a Connectix QuickCam aren't THAT far apart. -- Cellular phones: Interesting, especially since Motorola is such a large player. MOT is also an Intel competitor but that is something to consider later. -- Handheld game devices: This is actually one of the more exciting markets and one that was mentioned many months back in relation to Zip but not mentioned with the "mini-Zip." I think it could be very profitable. -- PDA (personal digital assistant): I own a Newton and the RAM speed is slow enough. I have my doubts here but we shall see, especially if USRX signs on -- GPS (global positioning systems): niche except in the upcoming automotive industry. I expect the GPS maps to be optical due to the huge storage needs though. -- Printers: Yawn. Most high-end printers use fast SCSI hard drives to store fonts. Many personal printers don't have or need it. Up to HP I believe.
Obviously it is the strategic alliances that will make or break (again assuming that R&D can bring such a complex product, much more so than Jaz, online ontime) n.hand. Iomega does not have the product lines to carry it themselves.
Microsoft's OS for CE is a large question mark. Bill pointed out the quote from the MSFT employee but MSFT has so many different departments.
I think the price is also an issue, given that a Kodak camera with 1mb of RAM ($8) costs $300, adding a $100 device would bring those costs up by a huge percentage. Obviously Iomega would need to target higher-end items until production levels could lower the costs.
Unlike the slimmer Zip models, which I absolutely love, I don't see the n.hand as a "given success." Iomega is only in development, where in the process we don't know. There are also other issues besides price that NEED to be addressed at some time.
First: Size. We don't have dimensions. How small is small? Seen a USRX Pilot? An Epson Photo PC? My Little Erikkson cell phone? I couldn't fit four quarter taped together on ANY of these products and consumer electronics, especially portable ones, are only getting smaller. MOT has those new "wearable" phones.
Second: Speed. It isn't mentioned anywhere. You HAVE to be curious. It does matter to some extent. Not the end-all-be-all, but a factor, especially as digital still photography turns into digital video capture.
Third: Competition. RAM prices are dropping. Where will the price of a 20 meg RAM card be by 12/97? What if n.hand is delayed into '98? After all, Jaz was delayed due to design problems and Jaz is based on Winchester, designed to sit still in a nice, warm, cozy office, and uses an external power supply. What about other product competition? As MF Eturkey said, Kodak jumping aboard doesn't mean Fuji will too.
I'm not saying the n.hand is doomed. Contrary to it, I think the game disk market is very interesting and one that fits in nicely with what little information we have, especially as the larger form factor, due to the larger screen, permits a product that wouldn't fit into most of today's new cell phones.
I just don't see this product the same way as I see the slimmer Zips, which I adore. It has much higher inherent risks and I tried to identify those as best I could. Counting on its success now seems reckless. We don't know if they even have a working prototype yet. Stockholders should set high standards for the company but not impossible expectations. Sometimes it takes a few versions and many years to get something right. Anyone remember Windows 1.0?
I think the idea is intriguing, the R&D impossibly difficult given the mission parameters, and the risks huge. I believe there are few companies that COULD pull if off, Iomega being one of them. That doesn't mean they will. I hope they can and hope the partners are lined up. I just don't have either of those pieces of information.
For those who expected the market to give Iomega $6 points today, don't be disappointed. It is a product far from accomplished, proven, or even produced, unlike Zip, and it is much more complex than either Zip, Jaz, or Ditto. The stock market is about predicting risk and reward. The move, to go off on a tangent for a moment, to the NYSE should prove most interesting regardless as I expect specialists, as I mentioned at earnings, to take inventory positions.
As more information comes, including size, speed, operating parameters, we'll know more.
I'm most excited by the game devices market more than the others. As a huge proponent of the "input revolution" I believe in digital cameras, digital video, scanners, etc. but I look at the size the current consumer level (RAM only) cameras and wonder how small this thing can be? Do I hear a half dollar? A quarter?
Cheers,
MF Nintendo
P.S. The press release did not mention the underlying technology, only compatibility with FUTURE Zip models. The leap to "rotating media" I made because of it being called a "mini-Zip" may have been premature and incorrect. I suspect not but I will also allow for all possibilities. 4+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:n.hand Date: 96-11-07 19:08:14 EST From: BoccaLu
SNDK estimates that the retail cost for flash memory will be $2.50/MB in 1998 (roughly when nhand will hit the market). That means $50 for 20MB of storage. While this is well above $10 for 20 mB of storage with nhand, flash does not require an on board drive. Thus the cost of the total storage solution is $50. The three keys to nhand's penetration of this mobile market will be:
1.) what does the drive required on-board the device cost??
2.) can it handle operating in rugged, outdoor, environments and adverse weather??
3.) will it be small enough to be embedded in host devices??
It has a lot of potential, but I think we have to see it before we get too excited. 5+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: n.hand competition part 1 Date: 96-11-07 23:21:30 EST From: PKeeler
First of all lets start out with the big picture to wet your appetite and show why so many huge companies are trying to get into this market segment. Imagine the internal Zip drive replaces the 3.5" floppy drive; huge; hundreds of millions sold. Now imagine a product that replaces camera film...
That being said, its more next century stuff (under President Gore). Meanwhile, DiskTrend and other analysts see this market as going from around $3 million/900,000 units to $400 million/11 million units in the next 2.5 years (source Instat/DiskTrend).
MF Ben quoted the street price for RAM ($8/MB) in a previous post I guess to show that memory card prices can come down. There is more than one kind of RAM. The price he quoted was for common DRAM. The memory products in this segment use non-volatile SRAM or something close to it. Much more expensive than DRAM, as you will see.
Intel, AMD, and Fujitsu make 80 percent of the flash memory worldwide. Remember it was Fuji who invented ATOMM media, offered it to Syquest, and then to Iomega. Iomega then invented the Zip drive, Fuji helped buy the first manufacturing equipment; the rest is history. So Fuji and Iomega could be co-developing this product, especially if its based on ATOMM media. Iomega's product was called disked based in their press release. This makes it different than all its current competition. There is room for everyone, but it probably won't explode until a standard is set. Here is the competition in end products basically falls into three groups/products. Most info lifted from EETimes articles. Everything I know (which is in here) I learned in the last two days from reading some excellent articles on CMP's website. Email me at pkeeler@ix.netcom.com and I will send you a .ZIP file through email with these articles. Without further ado...the competition:
CompactFlash (SanDisk, SNDK): Is derived from the larger PCMCIA standard for PC cards. It is basically a smaller version of those cards in a 50-pin rectangular package. With an adapter card, it can function in a standard PCMCIA slot. It incorporates an intelligent microcontroller with an ATA/IDE interface, thus making it plug-and-play compatible with almost every digital platform. That is the major difference between CF and its rivals (including n.hand I have to assume), which incorporate memory only and thus require the host device to provide the interface. In other words, it carries on it everything it needs except DOS and IDE and needs the system to have its own RAM. Of course the consumer has to keep paying for this interface, much like why portable hardrives can't compete with Jaz.
Currently the maximum capacity is 15MB using 32-bit technology. SanDisk just announced that they have developed 64-bit technology and are working on 256-bit. This will lower costs and increase sizes I believe. The device functions in a PCMCIA slot with an adaptor. The cost of a card and adaptor are $295 (much more than $10). IMO, SanDisk's product could carve out the high end where performance means more than price. However, $295 (for 15MB?) is a long way from $10 for 20 MB. The Canon Powershot 600 uses CompactFlash (CF) technology. More than 40 device makers have joined with SanDisk to push CF.
Miniature Card (Intel, INTC): Recent OEM prices in 10K quantities were $39 for the 2-Mbyte and $69 for the 4-Mbyte cards. 4 MB seems to be the maximum in size. Unlike the CompactFlash (and one reason why its cheaper) the Miniature Card does not carry its own interface thus needs a software driver in its host system, but does not need the host system to have its own RAM. Intel says these products could reach 32 MB. Its form factor is 38 mm wide, 33 mm long and 3.5 mm high. More than 20 companies have joined Intel and AMD in pushing Miniature Card.
Micron Technology has joined both the above alliances and will market a product similar to CF with some of its own designs though. Hitachi support CF but will also market its own version.
Solid State Floppy Disk (Toshiba): An SSFDC Forum was established in Japan last April with about 40 members, and the U.S. arm was established last month with about 10 members. Toshiba has entered into a technical licensing agreement with Samsung Electronics Co. Ltd. of Korea, which will second-source SSFDC products. The SSFDC format may well be the lowest in cost to the consumer. About half the size of a credit card, the first SSFDC is in a 22-pin plastic package that measures 45 mm x 37 mm x 0.76 mm thick and incorporates a 16-Mbit (2-Mbyte) flash device based on Toshiba's NAND architecture. A 32-Mbyte flash device will be offered in the fourth quarter, and a 64-Mbyte device will follow later. In development are 1-, 4- and 8-Mbyte versions. In conjunction with an ATA PC-card adapter, the SSFDC can be used as a standard PC card.
Meanwhile, IBM Microelectronics (Toronto) has not decided which format it will honor, but judging from remarks by Hans DeBruyn, product manager for storage products, the giant company is definitely leaning away from Miniature Card.
Eastman Kodak (Rochester, N.Y.) will profoundly affect and be affected by the emerging digital-camera marketplace. The company is hedging its bets, according to a spokesman Dave Beigle. Kodak recently introduced a digital camera, the DC20, at Comdex, with an anticipated price tag of $350. But that camera has permanently embedded flash, not a removable cartridge. Images are ported to a PC via a cable connection.
PKeeler Patrick Keeler 6+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: n.hand Iomega's position Date: 96-11-07 23:22:45 EST From: PKeeler
EETimes writer David Lammers speculated that the Toshiba/Samsung Solid State Floppy Disk would fill the low end with its low cost and 4-8 MB size; CompactFlash and Miniature Card would fill the high end with their larger sizes but much higher cost.
Iomega's announced N.Hand would seem to be cheap enough to compete on cost in the low end and have enough capacity to compete at the top end, at least with disks. I can't tell if the $100 price for the drive is competitive. I believe it is since add-on PCMCIA card readers are around $110 retail.
This is the first major product (since the 21 MB Floptical) that Iomega will market that is not sold to end users. Iomega, or SanDisk, sell to companies like Hewlett-Packard or Fujitsu who incorporate the devices in their products. KE has told us time and time again the magic price points that all consumer electronics products move at...$199,$149, and $99. As a consumer I believe the first digital camera(s) that hits these price points could be the next walkman, or something akin to the first cheap 35mm autofocus. The storage device in that camera(s) could be the dominant supplier of the film for the multimedia age (Tim Hill feel free to quote me on that :) ). Iomega's vaporware seems to have the capacity advantage over its products with similar cost rivals and the cost advantage against products with similar capacity.
Ben is correct on the size issue, it will make a difference. Weight will also be a factor. However, I think its cost that keeps digital cameras out of the main stream right now. Of course digital cameras are not the only product that can use n.hand or CF. CF is built into small monitor/recorders that are attached to patients and record their heart rhythms over a 24 hour period. But the Instat and Disktrend estimates for big growth I think are mostly centered on digital cameras and to a lesser extent, palm computers or PDAs.
I disagree with some posters who feel the earnings from n.hand will be far in the future. Since this is an OEM market device, and since Iomega sees shipments of N.Hand enabled product in mid-1997, shipments of the device to OEMs will have to take place late 1Q97 to early 2Q97. Revenues and earnings will be booked then. Looking at OEM adoption of the laptop Zip, I have to conclude that the devices must be through beta-testing and in the hands of potential OEMs now. As this is realized in the investment community I think that 1997 estimates will have to be moved up. Certainly we can look for OEM agreements by early next year.
The Microsoft quotes in the release are interesting since they seem to not be aligned with one of the other formats. Two other companies that don't seem aligned are Sony and Motorola. Microsoft recently started a push (with Windows CE) into the PDA and palm computer market. However, I still come back to the ATOMM media and Fuji as an obvious partner with Iomega.
PKeeler Patrick Keeler 7+++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:n.hand competition part 1 Date: 96-11-08 01:47:34 EST From: JonTara
<<Currently the maximum capacity is 15MB using 32-bit technology. SanDisk just announced that they have developed 64-bit technology and are working on 256-bit. This will lower costs and increase sizes I believe. The device functions in a PCMCIA slot with an adaptor. The cost of a card and adaptor are $295 (much more than $10). IMO, SanDisk's product could carve out the high end where performance means more than price. However, $295 (for 15MB?) is a long way from $10 for 20 MB.>>
This is the wrong comparison. This comparison makes no sense whatsoever.
Flash memory is not meant to be a permanent storage media. It is meant for temporary storage prior to transfer to less expensive bulk media. If used in the way you are envisioning (and the way that everybody who is going to be spinning spreadsheets on this is going to want to envision it...) n.Hand is actually much more costly than flash memory.
What? How can that be?
MF Ben explained it quite well. nHand media costs $10 for 20 megabytes, or .50/megabyte. A 2.7MB IDE hard drive can be bought for $350 now, or .12/megabyte.(Or a little cheaper than regular Zip disks). Within the next year, I believe we will see fixed hard disks at below .05/megabyte.
So, you, consumer have a choice: you can buy a flash memory module for, say $200 (or just have it built-in to the camera) and put the camera in a docking station to transfer to your computer, or you can add bulk to the camera with a little whirring disk, and pay 10 times as much for storage. If, say, a roll of film fits in 20MB (don't believe the 50-60 picture estimate) then you have the choice of paying $10 or $1 for storage. Which do you choose?
You could say that people are already used to paying $10 per roll, and so they will.
But you have to consider what will happen if somebody comes along and shows you how to do it for $1/roll.
Of course, you can always transfer from the nHand disk to cheaper media, but why? The total cost of the drive + media is likely to be about the same as the flash memory. And cheaper memory is coming - FPRAM will be priced similarly to DRAM, but has the same non-volatile properties as flash memory. (And better - it is much faster to write to - same speed as DRAM.)
That said, this could interest people who take a LOT of pictures - the traditional niche market for digital photography today - insurance adjusters, real estate salespeople, etc. These people have a need to take a lot of pictures before going back to transfer, and it would be a lot cheaper to use a couple dozen nHand disks than to have a couple dozen flash cards!
End Report. Posts covered through 3 a.m. 11/8/96. _______________________________
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