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Tuesday, December 24, 1996 Iomega was down $1/8 Monday, closing at $18 (-0.69%) TODAY'S RECAP: It's The Thread That Would Not Die! Fools posting in our Iomega folder are still preoccupied with the Zip vs. LS-120 debate. And perhaps that is to be expected, considering that as we move into the final hours of the hectic Christmas shopping season, we are getting little new information from the usual news fronts. Many channel checkers are reporting brisk sales of Iomega drives at retail outlets across the country, but such evidence is so anecdotal it is hard to rely on it for hard investment decisions. Therefore, given the dearth of news, the old stand-by discussion re-emerges, and we are left with the spectacle of longs and shorts affirming and re-affirming old positions while trying to tear down the arguments of those that oppose them. For those of us who are obsessed with this company, it's sort of like watching your favorite M*A*S*H episode for the umpty-umpth time. PROGRAMMING NOTE: The stock markets will be taking a day off to celebrate Christmas tomorrow, and so will we. Look for the next edition of ~Iomega in Fooldom Today~ on Thursday, December 26. 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++Cynicalguy reports that VST is taking orders for their laptop Zip
drive. As always, the following posts represent the thoughts of our contributors, not those of The Motley Fool And now, the Best of the Board...Started 3 am ET 12/23/96. 1++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: VST taking orders for PB ZIP Date: 96-12-23 14:04:03 EST From: Cynicalguy
VST Zip Has been priced and they are taking orders. Price to be $329.95 and to ship next quarter. Well, in a week it will be this quarter. That's like when I was a kid and I would say before Christmas break "see you next year" just to see the strange reactions on other kid's faces. I stopped doing that last year. :)
http://www2.skyworld.com/cgi-shl/cfml.exe?Template=/vsttech/group.cfm&ObjectGroup_ID=371
http://www2.skyworld.com/cgi-shl/cfml.exe?Template=/vsttech/group.cfm&ObjectGroup_ID=355
They have two separate web pages for each Zip. (5300/190 & 1400)
GO IO!!!!!!!!! Cynicalguy Bill Bronsteen the plan coming together the NEW beginning of the beginning
ps-is everyone else hearing that buzz now? Something is going on! 2++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: No Jaz Internal at Merisel Date: 96-12-23 14:06:59 EST From: Shig2
Jaz Internal has become back order at Merisel, the nation's second largest distributor. Cartridges are also in back order for most SKUs.
Another thing I noticed is Iomega is having hard time meeting the ETA date for the past 4 weeks for Jaz and 2 weeks for Zip. I believe Iomega is not shipping out of inventory any more. Instead they must be coming right out of plants. Another good Christmas sign.
Merry Christmas, Shig 3++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:No Jaz Internal at Merisel Date: 96-12-23 15:46:59 EST From: MF ETurkey
<<<I believe Iomega is not shipping out of inventory any more. Instead they must be coming right out of plants. Another good Christmas sign.>>>
Well, another way to look at it is to say that when the shelves are empty, the sales are lost. That would indicate a problem with either production, or demand being in excess of expectations (which could be a market research problem). I, for one, don't like hearing that the shelves are empty days before Christmas. I'd like to know that there are some drives left for those sales.
Those that may buy in the subsequent quarter or two because the shelves are empty now may well be buying at lower prices, meaning iomega has lost potential revenue.
To IAmErgoSum (Bill Polk) - You are doing one hell of a job web-surfing lately. Great info.
Eric 4++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: A: drive Date: 96-12-23 17:47:54 EST From: CayugaDan
OR Technology drives (which are LS-120 drives) are still in stock at Ingram. They have had a stable amount for the past few weeks, which is about 50 per each at the 7 warehouses for both SKUs. They've also (if memory serves me right) lowered the price to dealers, but not the list price.
Also they added a third SKU, a 10 pack of LS-120s. There are 10 of these in 3 warehouses. oddly enough, they are priced more than 10 of the individuals. This might be because they just dropped the price on the individuals, but failed to do so on the 10 pack.
My opinion is that these drives are selling in limited amounts to dealers. They are not flying out Ingram's doors. I know that thousands of Zip drives are.
Dan Rapaport Cayuga Computers 5++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: LS-120 vs. Zip Date: 96-12-23 22:47:52 EST From: HYPEMENOT
Somehow, some way, some day, I may actually be successful (but I'm not about to bet on it) in getting participants on this board to understand my position.
I am NOT an advocate of the LS-120 or O.R.Technology, but I am also NOT an advocate (and here is where I part company with many of you) of the Zip or Iomega Corp.. However, I AM an advocate of investors making a thorough, rational, objective review of all the pertinent information - positive and ESPECIALLY negative - that may impact on the prospects of the companies they invest in.
The reason I have made so many recent posts about the LS-120 is, that it appears very likely that a major marketing push is soon to be underway and, despite this, there continues to be an unhealthy air of complacency in this forum. IMO this confidence is, at the least, premature. While some (perhaps many) of you think the battle to replace the 1.44MB floppy is over, largely because IO already has approximately four million Zips in the hands of consumers, my view (as unpopular as it may be) is that in a universe of 200 million plus computers, this COULD prove to be nothing more than an early lead in a race that has only just begun.
Careful analysis and a healthy respect for the POSSIBILITY that the LS-120 may turn out to be formidable competition (even if that means contemplating the possibility that the consumer may NOT make, what is firmly believed here, to be the right choice) are not aided by posts such as the one I criticized last night from DILLIGF. Implying, as he did, that concerns re a possible LS-120 ramp are either unjustified or exaggerated, because he says << Of course, since OR Tech is not subject to the fraud laws in this country it can just about make any comment it wishes.>> is a disservice to anyone that desires to reach conclusions based on accurate information. Let me just say that the last thing any investor in Iomega should want, is for the contest between the Zip and the LS-120 to be decided based on the truthfulness of DILLIGF's statement.
He also suggested through the retelling of some history, that with regard to manufacturing LS-120's, Mitsubishi is not about to produce << 10,000 or 16,000 units a day of production unless Imation agrees to pay the cost of production up front and Compaq were to guarantee such a contract >> Why a past dispute which Mitsubishi had with Insite Technology (which DILLIGF states was the initial developer of the floptical technology) should have any necessary impact on their announcement in August that they would produce LS-120's, is beyond me. But, that question is besides the point. As I said in my response last night, it is Panasonic (one of the founding members of the LS-120 group) NOT Mitsubishi that announced it expected to ramp production up to 500,000 units a month. And it was the Kaifa Group, NOT Mitsubishi, that announced their intention to produce 10,000 thin line LS-120's a day.
My point in reviewing this is simple. If you wish to make investment decisions based largely on emotion or intuition, that's fine, so long as you recognize that this is what you are doing. If, however, you really want to base your decisions on factual analysis, then do it rigorously and objectively, and cast aside any information that appears false or inaccurate, ESPECIALLY if it would lead you toward a conclusion to which you are predisposed.
HYPEMENOT 6++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: HYPEMENOT Date: 96-12-23 23:33:40 EST From: DKStuart
I value your posts. LS-120 is definitely food for thought. Here's my take on it. Once LS-120 starts their marketing "push" the industry and its consumers will DEMAND one standard. People don't want to be the only idiots in America to own a Mini-Disc instead of a CD-player, or a BETA machine when they can only rent movies on VHS.
In short, LS-120's "marketing push" will actually HELP Iomega by forcing the OEM's hands! With 4 million ZIPs (and probably at least 25 million $20+ discs) already in the market, the pressure leans HEAVILY in favor of IOM. I doubt even COMPAQ will say "screw you, consumer, we're going to cram LS-120 down your throat whether you like it or not!!" The industry will NOT want to see a prolonged "battle" for supremacy that will only frustrate and alienate consumers. No, this fight won't get into the 3rd round.
So, LS-120, come on, climb into the ring. The sooner you climb in, the sooner this fight is over and we can all enjoy IOM's ascent to the levels of INTC, MSFT and HWP as a provider of "must have" technology. 7++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:LS-120 vs. Zip Date: 96-12-24 00:43:31 EST From: PKeeler
>>> And it was the Kaifa Group, NOT Mitsubishi, that announced their intention to produce 10,000 thin line LS-120's a day. <<<
Has any LS-120 advocate ever answered this question: With such huge manufacturing companies like Matsushita and Mitsubishi supposedly ready to ramp hundreds of thousands of LS-120s, why is the Kaifa Group involved at all? The Kaifa Group had total revenues of $250 million in 1995. That is less than Iomega itself did in the 2nd and 3rd quarters of this year.
Matushita/Compaq/3M has become Kaifa/OR tech/Imation in 6 months.
>>> My point in reviewing this is simple. If you wish to make investment decisions based largely on emotion or intuition, that's fine, so long as you recognize that this is what you are doing. If, however, you really want to base your decisions on factual analysis, then do it rigorously and objectively, and cast aside any information that appears false or inaccurate, ESPECIALLY if it would lead you toward a conclusion to which you are predisposed. <<<
So if someone doesn't agree with you they are not arriving at this on clear headed logic, but on emotionally dictated predisposition? Why can't you grasp that most people have read your dozens of posts on the impending LS-120 threat and have read the counter-arguments (which you never reply to other than to say something like "crazed logic of Iomegan Kevinfurr") and have concluded that your point of view cannot be taken seriously given the present facts. No matter how many times you take a couple of the facts and repost them and repost them and repost them.
$149.95 price point for the 12.7 mm LS-120 is very interesting. How can they make money on the 12.7 mm LS-120 if they are selling the 3.5" LS for $210 to $239? OR Tech cannot make it up on disk sales. Lets see if the drive ever ships, what its selling at then, and if any do sell.
It has been stated here over and over that the LS-120 makes a better choice for laptops because it combines floppy and big floppy in one drive. Therefore, not having to have 2 separate drives and swapping them. On the surface this makes lots of sense. However, what is the floppy used for today? Nothing except emergency booting. What can't I buy? A laptop LS-120 that is bootable. Laptop users are even worse than Mac users, they never open up their computers to add cards or BIOS revisions ;-) You will still need the floppy. Might as well get a Zip.
The LS-120 has no aftermarket sale appeal. How many products became a standard in computers without first having success in the upgrade market? Modems, CD-ROMs, SoundBlasters, Graphics Accelerators all had and have big aftermarkets.
PKeeler Patrick Keeler 8++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Jury still Out Date: 96-12-24 01:29:05 EST From: Tgizip
Lets face it the jury is still out on floppy replacement. I am currently out of IOM. Bailed out on the 13th. On the sidelines for now. I still like IOM but it scares me. Bottom line is if zip replaces floppy then IOM is currently grossly undervalued. If LS-120 gets adopted by a couple of OEM's then IOM is a single digit stock. You can argue that IOM already has an impressive list of OEM's but how committed are these OEM's to zip? I still have not seen an IBM with an internal zip. HP has it in a couple of SKU's, PB/NEC has it in some SKU's. No MFG has made a major commitment to the zip at this point. The ball game is far from over. Sony Betamax was a very innovative product, 8 track tape decks were very popular. I am not saying that Iomega can not do it. I'm just telling you to look at it objectively and realize that IOM is a high risk investment 9++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:LS-120 vs. Zip Date: 96-12-24 01:54:44 EST From: HYPEMENOT
PKeeler,
Congratulations, when it comes to misrepresentation, you make DILLIGF look like a rank amateur.
I'll just respond to a few of your comments. You wrote:
<<< Why can't you grasp that most people have read your dozens of posts on the impending LS-120 threat and have read the counter-arguments (which you never reply to other than to say something like "crazed logic of Iomegan Kevinfurr") and have concluded that your point of view cannot be taken seriously given the present facts.>>>
Really interesting, considering that two days ago, in response to a message KEVINFURR posted disagreeing with me, I responded by THANKING him for stating his arguments FAIRLY and LOGICALLY. But then again, why let a FACT like that get in the way of your conclusion
Next you say,
<<< $149.95 price point for the 12.7 mm LS-120 is very interesting. How can they make money on the 12.7 mm LS-120 if they are selling the 3.5" LS for $210 to $239? OR Tech cannot make it up on disk sales. Lets see if the drive ever ships, what its selling at then, and if any do sell.>>
I guess you didn't see Cayuga Dan's post earlier tonight in which he indicated that Ingram just recently reduced the price on the LS-120 (he didn't say by how much). You really ought to try and stay current on this stuff if you intend to criticize others.
Next, you write,
<<< Has any LS-120 advocate ever answered this question: With such huge manufacturing companies like Matsushita and Mitsubishi supposedly ready to ramp hundreds of thousands of LS-120s, why is the Kaifa Group involved at all? The Kaifa Group had total revenues of $250 million in 1995. That is less than Iomega itself did in the 2nd and 3rd quarters of this year. >>>
First of all, Kaifa's $250 million in revenues, makes it one of (if not the) largest component manufacturers in China. By comparison, Legend, the partner Acer chose to market the AcerBasic in China (which you and others here got excited about) had $60 million in revenues last year, and is still considered an important player in the Chinese computer market. But apart from that, it is O.R. Technology that developed the slim line LS-120, and they probably want to insure a third independent source of supply. My guess is that you would see the benefit of this much more readily if it were Iomega finding another licensee for the Zip. I'd bet that if Iomega had happened to pick the Kaifa Group as a manufacturing partner, you would have been posting messages about Kaifa being one of the largest in China, rather than this CRAP about them only having $250 million in revenues.
Finally you say,
<<< What can't I buy? A laptop LS-120 that is bootable.>>>
Is it your contention that the new BIOS's from Phoenix, AMI and Award which are either out now or will soon be available (which allow both LS-120's and Zips to be bootable) are not going to be available to laptop manufacturers to incorporate in their 1997 machines? I wouldn't want to bet on that one, but then I guess you already have.
HYPEMENOT 10++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Earnings Date: 96-12-24 02:01:44 EST From: Xycor
As IOM fools await the next earnings report in mid-late January, I'd like to give you three reasons why I am SHORT on IOM, and hear what you IOM hypsters have to say in defense.
(1) Whether the market is overvalued or chugging along, no one denies that we've heard the bull's roar for perhaps a bit too long. Even if the Garzarelli reports are inaccurate, most people probably expect a correction in the next month or two - watch out for high beta stocks like IOM to suffer.
(2) Zips are obviously selling out - they're relatively inexpensive and it's Christmas - the perfect gift for yourself or others! So all these posts hyping sales are quite irrelevant - what is interesting is the frequency with which Fools are mentioning the temporary shortage of Zips - if I ran a business, no one who wanted my product would ever leave the store empty handed.
(3) 1997 will undoubtedly be another stellar year for computers, but with more focus on the Internet, I feel that more people will be looking to purchase new systems (with higher modem speeds better resolutions), rather than increasing memory. The first part of 1996 was for Zips, but the tide has already shifted. As a result, the staple of IOM might be somewhat affected, although it does help a bit that some computers are sold with internal Zips.
Put options on IOM look very attractive due to short-term volatility. At some point during the next few months, put holders should be able to cash in (but you must track IOM diligently), even if the long-term line is positive. 11++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Earnings Date: 96-12-24 02:14:48 EST From: Foolshdog
>> (3) 1997 will undoubtedly be another stellar year for computers, but with more focus on the Internet, I feel that more people will be looking to purchase new systems (with higher modem speeds better resolutions), rather than increasing memory. <<<<<<<
uh.....Xycor, do you know the difference between memory and storage?
-Jim 12++++++++++++++++++++++++++++++++++++++++++++++++++++++ Subj: Re:Earnings Date: 96-12-24 02:27:28 EST From: JohnKess
>>(1) Whether the market is overvalued or chugging along, no one denies that we've heard the bull's roar for perhaps a bit too long. Even if the Garzarelli reports are inaccurate, most people probably expect a correction in the next month or two - watch out for high beta stocks like IOM to suffer.<<
Maybe, maybe not. It's hard to time the market. Many scenarios are possible. Perhaps the market will just slide sideways, except for a few high growth stocks.
>>(2) Zips are obviously selling out - they're relatively inexpensive and it's Christmas - the perfect gift for yourself or others! So all these posts hyping sales are quite irrelevant - what is interesting is the frequency with which Fools are mentioning the temporary shortage of Zips - if I ran a business, no one who wanted my product would ever leave the store empty handed.<<
Yes, I don't like empty shelves either. But isn't this the retailers problem? It seems there are plenty of Zips in the channel. Anyway, such a problem to have!! It doesn't take an emotional hypster to put a positive spin on this "problem"...does it?
>>(3) 1997 will undoubtedly be another stellar year for computers, but with more focus on the Internet, I feel that more people will be looking to purchase new systems (with higher modem speeds better resolutions), rather than increasing memory. The first part of 1996 was for Zips, but the tide has already shifted. As a result, the staple of IOM might be somewhat affected, although it does help a bit that some computers are sold with internal Zips.<<
What is the evidence for this?? Yeah the consumer wants the latest and greatest technology --- except they prefer puny, slow storage? ...You're stretching a lot here.
>>Put options on IOM look very attractive due to short-term volatility. At some point during the next few months, put holders should be able to cash in (but you must track IOM diligently), even if the long-term line is positive. <<
Let's see...a some point in the future stocks might correct and IOM might correct a lot, Zips are selling out, and even though Zips have been the hottest peripheral in sight maybe people will stop buying them in the future even though 1997 will be a "stellar year" for computers. I think you on thin ice with this logic. Take out the wishful thinking and you've made a nice argument to buy!
End Report. Posts covered through 3 am ET 12/24/96. _______________________________
WE
DELIVER - Get IOM
In Fooldom Today delivered
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