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Thursday, December 19, 1996 Iomega was up $1 Wednesday, closing at $18 3/8 (+5.76%). TODAY'S RECAP: Significant recovery... or dead cat bounce? That was the question that preoccupied many posters in our Iomega forum Wednesday. But since it is hard to be definitive about one day's stock movement, there was little substance to support either side of the argument. Many keystrokes were wasted as the discussion sometimes turned ugly, and since it was impossible to decide the issue with the information available, our board looked more like a mosh pit during a Pearl Jam concert than a civil analysis of a billion dollar corporation and the shares of stock that represent it. Oh well. Word has reached our community that a company called Intermag has made a deal with Iomega to manufacture Zip disks. Iomega has not released any information about this arrangement, and most of the details we have can be found in the post by ~Ken1Marcus~ (4++, below). 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++RgeSeymour comments on Iomega's advertising presence at the retail
level. And now, the Best of the Board...Started 3 am ET 12/18/96. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool. 1++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Occam's razor (blade) Date: 96-12-18 03:43:04 EST From: RgeSeymour
The 3Q conference call also left me thinking we'd see lots of Iomega advertising for Christmas, a television and print blitz. But checking back on that call, it seems like we may indeed be getting all that KE promised. I haven't consulted the tape, but here's MF Debit from her excellent conference call synopsis (available under the Fool Wire area):
<<Knowing that the fourth quarter is normally the strongest selling season in retail, particularly in the US and Europe, they needed to position themselves to capitalize on this peak retail selling season. They have invested heavily in building demand and acquiring shelf space for the upcoming quarter. They expect to have a very strong presence at virtually all of the major computer retailers in the United States. Additionally, they have increased their inventory to improve their ability to respond to any upside in demand.>>
My rough notes basically just confirm that. In answering Emerald's Garner, KE said to expect a strong presence throughout every major (computer?) retailer. And the major computer retailers in my area (Comp USA, Computer City, Circuit City) all have a nifty new Iomega island or video display. So perhaps we're wrong to be looking for lots of mainstream advertising.
My own sense is that Iomega has done an excellent job of branding so far, enough to create excitement among computer users who know or can be easily induced to know why they might need a Zip. Simple visibility within retail channels is enough at this point to clinch these types of sales.
But the great unwashed masses of computer users (i.e., people like me) still don't know they need (or will need) a Zip. And when they figure it out, they still won't want to pay more than $99. Many won't figure it out until the Zip simply appears in their CPU and they start using it. So my theory is that Iomega doesn't need a gonzo ad campaign until it's got the price ($99) or the product (massive SKU presence in OEMs) to aim the campaign at that mass market. That is, the big ad spending earlier in the year on TV helped build the Iomega brand for the technoliterates. The next big media blitz will aim to appeal to a larger audience. Well, just a theory.
Louis Corrigan 2++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re: Store checks Date: 96-12-18 10:48:48 EST From: RunngMoose
>>>> I dont know about the slowdown that was predicted by JPM but theew were huge lines tonight at Best Buy and peripherals seem to be selling extremely well<<<<<<<<
I have said before in this forum that my experience serving on the BODs of various computer user groups is that if people cannot, or will not, buy a new computer now, they tend to buy (or impulse buy) some add-on that is not expensive due to their anxiety for new computer HW. My take is that RAM, printers, modems, and Zips will be big this X-mas. Why? they are cheap, and useful. Also the printers and zips can to xferred to the new computer when they take the plunge. Lastly, the people that are buying don't really desperately *need* any of this stuff, but they *want* it and it will have utility to them, even as a hobby interest. Consumer purchases always involve satisfying certain emotional needs.
From my travels i see continued penetration of Zip and Jaz into the graphics industry and Zip into education, despite all the ranting and raving from some board participants about networks and higher priced drives with lower cost/platter or cost/meg taking over the world. I think that in the end there will be some of each, but todays computer buyers are not technical super-jocks and are most sensitive to the initial purchase price!!! Zip has no competition in this regard. Not yet, anyway. Zip disks and drives will be big this year as X-mas gifts for college students who have computers in their dorm rooms.
Regards, Dave 3++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Iomega A lot to respect Date: 96-12-18 11:06:05 EST From: Arentz65
CyberVster:
<< When iomega does achieve its goal it will have ramped zip production by a factor of more then 10 from todays estimated 5 million unit level. Skeptics can feel free to jump all over this but please try to introduce intelligent arguments,>>
100 million PC's are expected to ship yearly by the year 2000 so if Zip is going to replace the floppy than your above number is still off by an order of magnitude(i know you said greater than but that seems a bit off :)). By the time the Zip does replace the floppy(around 2000) we are talking about ramping zip production by a factor of 20(not 10) from todays estimated 5 million unit level.
I agree with most of your post. Although i would add disclaimers on your negatives. 1. What are the chances that the iom team would fall apart? not likely IMOP. They are much closer to their stated goal now than they were just 6 months ago. The finish lines in sight and they are focused on winning. These are smart people who are not prone to falling on their faces(read experience).
2.LS-120/Swan taking over? The LS can be put to rest i think. If they were going to dominate the floppy replacement I would think they would be shipping in ALL of Compaqs machines by now? The LS is too slow, too expensive, has no momentum, and is/will be an aftermarket failure. I'll grant you that the Swan drive is more of an unknown but iom has such a lead i only see one possible way that the Swan/mitsumi drive has a chance of success. It's window of opportunity is/has been paper thin and getting smaller all the time. By the time the Swan unit ships there will be around 6 million Zips installed. By the time any OEM would have had time to evaluate/test and then offer the Swan drives at least 7 million Zips will be installed. The likelihood that either of these drives will be any competition is much smaller than most people think IMOP.
3. That Zip sales could flatten out is more likely to happen than either of the two above. We have not seen this yet, but it could happen. As you said though there is a confluence of forces that is pushing the need for Zip type storage. Iomega was definitely at the right place at the right time, with the right people. I do not see a confused jumble though. The market we are talking about(floppy replacement) will not accept several standards. The OEM's will not offer different drives. It is just too confusing for consumers and too difficult for the OEM's to deal with.
Eric 4++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Intermag to make zip disks Date: 96-12-18 13:43:41 EST From: Ken1Marcus
KB- Intermag Adds AOL Floppy, Iomega Zip to Firm's menu
(The Sacramento Bee <snip>
Intermag's recent agreement to manufacture and package disks for the hot-selling Iomega Zip drive, should ensure the company's stability in the Sacramento area for years to come, said Gerrit van Hofwegen, cq the -- company's general manager. Intermag has about 105 permanent workers and another 75 to 150 temporary employees, van Hofwegen said.
Taiwanese-owned Intermag is one of the five top disk makers in the world, van Hofwegen said, and one of the few -- that can do manufacturing, software duplication, labeling and shipping all in one spot -- which keeps costs down for its clients. "It's a whole new thing we're bringing to the party -- that we can do everything in one place," van Hofwegen said.
Its deal with Iomega calls for Intermag to manufacture 100 megabyte Zip disks -- which are about twice as thick as a normal floppy disk but hold 50 times as much data -- in Taiwan and ship them back Sacramento for packaging and shipment. It's an alliance that could work well for both companies.
"Iomega is strong in R&D. We're strong in mass production," van Hofwegen said. <<
I snipped out the stuff unrelated to Iomega( They are going to do the disks for AOL)
ken
http://www.sacbee.com/ 5++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Intermag to make zip disk Date: 96-12-18 14:05:25 EST From: PKeeler
The question is: does Intermag replace Megamedia or does Iomega need the additional production for forecasted future Zip disk sales? If you believe Emerald and I its the latter ;-)
Shouldn't Sentinel be shipping soon?
All these new production announcements lead me to conclude that Iomega has been shopping around for production. Looking to lower costs by using the tremendous volume in its products to get more lucrative manufacturing agreements. You can see this with the Dream Team, Matsushita, buyout of Epson, Intermag, Stormedia. It must be nice for a company that had to beg for parts to suddenly be fielding lucrative offers of manufacturing capacity. Companies that wouldn't give Iomega the time of day 18 months ago are now ringing KE's phone looking for a piece of the business.
Its a different Christmas in Roy this year. Last year KE got a fruitcake from IMPX, this year he's getting a loaded bass boat from Intel.
Merry Christmas KE :)
PKeeler Patrick Keeler 6++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: A lot to respect, oops Date: 96-12-18 14:34:44 EST From: Arentz65
I blew it in my response to CyberVster.
<< 100 million PC's are expected to ship yearly by the year 2000 so if Zip is going to replace the floppy than your above number is still off by an order of magnitude.>>>
He was not an order of magnitude off, just a multiple off. Still big numbers but not 500 Million. That mistake got me thinking. I have been looking to the year 2000 as the date when Zip would come close to shipping with every computer. What happens then though? Does the Zip just die off?. Shorts we know what you think so don't bother. Besides not one short has shown that he or she understands how and why technology is adopted and then clung to by the end user. With the migration path the Zip has, first to the 200Mb version than a 400Mb version, I can see Zip being the floppy replacement for at least 10 years, probably quite a bit longer. How many Computers are projected to sell between 2001-2006? At least 850,000,000(10% growth rate) Barring a major recession or alien invasion.
So by the end of 2006 there will be an installed base of around a Billion computers, with virtually all having a Zip installed. Pick a disk ratio, any disk ratio and see how many disks you come up with.
Ea 7++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Unisys Update: Zip Soon Date: 96-12-18 14:50:44 EST From: IAmErgoSum
By way of background, Unisys announced in June, 1996 that starting in July it expected to ship "selected Aquanta DM and Aquanta DX models with the Zip drive installed as part of a standard configuration. Customers would also have the option to have the Zip drive installed in any Unisys PC". [ Note: The Unisys Aquanta line offers 5 basic models. However, each can be configured in a variety of ways]
Well, now the third quarter and most of the fourth has come and gone and we have not see any specific configurations with Zip as standard. I expect this will change shortly.
I spoke with Unisys representative today and was told that Zip would be standard in a couple of configurations, but that he couldn't tell yet on his system, because they probably hadn't been "officially released" yet. [He spoke as though it was a done deal, i.e. with some surprise when he couldn't find it on the system] I asked about Zip as option and he said that Zip was currently available as an option on some configurations, but that this option was only "officially released" three weeks ago and so he would have to check on exactly which ones manually. I got the impression that the way Unisys works is that you go through exactly what kind of components you want on your computer and the representative's system then spits out whether this is doable or not and the cost.
Regards,
Bill Polk 8++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re: Incestuous Competition? Date: 96-12-18 14:58:02 EST From: MarkM10073
Normally HYPEMENOT doesn't need anyone springing to his defense (and probably doesn't need it here) but I can corroborate that in at least some locations the EZFlyer is doing well. I don't even try talking to the salespeople at CompUSA (Long Island) but the Flyers are there on the shelf and do seem to find some buyers. At the nearby Circuit City inside the Incredible Universe (don't ask - and don't invest in Tandy ;-) ) the sales clerk said the EZFlyers were moving, and by the appearance of the shelves they were. BTW, this conversation started when a customer came up and asked for the EZFlyer by name. The funniest thing about all this is that when I checked the shelves the EZFlyers were sitting next to the old 270 drives, which were priced at $549. Anyone want to figure out the per megabyte cost for the additional disk space?
In both locations Iomega got at least 3 times the shelf space, including prominent end cap displays, and there were plenty of empty spaces from which people had obviously taken drives to purchase. By all indications Iomega is doing quite well this quarter, IMO much better than Syquest, nevertheless Syquest is definitely selling some drives too. When people report on this fact it is much better to attempt to assess the information intelligently rather than indulge in name calling.
FWIW,
Mark 9++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re: International Data Corp. Date: 96-12-18 21:14:45 EST From: Bill P3114
12/17/96 - "International Data Corp(IDC) of Framingham MA, predicts PC shipments in the US will exceed 20 million by the end of the fourth quarter of 1996....
It looks like the fourth quarter is good...that in turn should help peripheral sales ...the storage industry will also benefit from the holiday season in the first quarter of the new year as many users get imaging products, digital cameras, etc.. ...people are really going to require more storage. Business users needing easy to implement back-up solutions should make a winner in holiday sales of writable storage products, such as Roy, Utah based Iomega's Zip drive, says Ray Boggs of IDC." 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:OEM Zips Date: 96-12-18 21:58:27 EST From: JKnuth5871
In response to the question of higher percentage of OEM Zips. Iomega has a licensing deal with matsushita which,in my opinion, will actually REDUCE the percentage of zips produced by IO that will ship to OEM'S, in relation to the total revenue that IO receives. It seems to me the reasons to license zip are relatively simple. 1. The ability of a high-volume producer to reduce unit cost, thereby encouraging more OEM inclusion. 2. The need for second source of drives to reassure OEM'S of adequate supply. 3. The ability to increase production without IOM assets, which can then be used for higher margin product. ( i.e. laptop or slimline zip , n-hand, etc.) 4. Royalties which flow directly to the bottom line. 5. Margin improvement due to higher tie-ratios( hopefully much higher) 6. Access to Matsushita's OEM and retail channels. 7. A HUGE conglomerate with VERY deep pockets that can now produce zip, which I am sure will carry higher margins than floppies.
It is entirely possible that IOM will have much slower revenue growth than earnings growth, but that is dependant on 2 key elements ( in this I am speaking of ZIP revenue only, not other products.) Element 1 is : How much of zip drive production will we see in 97 as a % of total drives? 2. What level of future demand is there for zip?
Time will tell. Hope this helps.
Jim Knuth p.s. any matsushita zip drive sightings out there yet? will far east be first? Possibly ACER? 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: ZIP NUMBER 2!!! Date: 96-12-18 22:57:42 EST From: Cynicalguy
The New Mac Week Top Sellers list just came out. The Jaz dropped from 4 back to 5 where it was before. And the Zip jumped up to the second spot, with only one monitor ahead of it. This is most amazing because this is done on a dollar basis. If memory serves correct (rare), the Zip has never had a spot so high.
#1 in December is possible!
DECEMBER 16, 1996
VOLUME 10 NUMBER 48
November top sellers
Oct. Nov. Hardware
1 1 Sony Multiscan 17sfII monitor
3 2 Iomega Zip drive (external)
2 3 Sony Multiscan 20sfII monitor
* 4 Apple Muliple Scan 15 Display
4 5 Iomega Jaz drive
* 6 Apple Color LaserWriter 12/660 PS printer
10 7 Apple Multiple Scan 1705 Display
* 8 HP LaserJet 6MP printer
* 9 AppleVision 1710 display
* 10 Sony Multiscan 15sfII monitor
http://www.macweek.com/mw_1048/nw_top_sellers.html
GO IO!!!!!!!!! Cynicalguy Bill Bronsteen the plan coming together the NEW beginning of the beginning
12++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: n-hand drive size Date: 96-12-19 02:22:32 EST From: Arentz65
<<<From: The Augur
The media is the size of a book of matches the drive is much larger.>>>
I posted this info a while back but it looks like some shorts missed it. These are specs from the iomega Web page.
* Designed specifically for handheld devices * Small: Drive footprint is less than a credit card (about the same as PCMCIA Type 3 disk), * 3/8 inch high * Disk: Less than half the size of a business card * High-capacity: 20 megabytes/disk
So the n-hand drive is smaller than a credit card and less than 1/2 an inch thick. A drive that is .375 of an inch thick and has a footprint smaller than a credit card does not seem "much larger" than a book of matches.Sounds like this COULD fit into a pager If someone wanted to build it.
It's just plain dumb to think the n-hand won't fit into todays hand held devices. What do the shorts think it is designed for? Hasn't iomega shown that they are talented at designing products?
You would think they would realize something is wrong with their positions when they have to constantly spread lies, innuendoes and misinformation in order to scare people out of their shares.
ea
End Report. Posts covered through 3 am ET 12/19/96. _______________________________
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