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Tuesday, May 20, 1997 Iomega was down $3/16 Monday, closing at $17 3/8 (-1.07%)
Mark, You used to sign off with
<<10 million Zips by September. now you're saying <<You are suggesting that 2 million units are being produced each quarter. How the heck, with all due respect, do you have any idea how many units are being produced? * They could be running at 1 million drives per quarter. Or less. Or 2 million. You don't know, I don't know, no one on this board knows. Period.>> so back in February you expected 6 million more drives to be sold by september and now you don't even believe Iomega can produce 2 million a quarter. I'm just curious what made you change your mind. My sincere wish is that Iomega will reach the 10 million Zips by September milestone. That's my wish. It was my wish when I used it as a signoff and I'd still use it as a signoff, were it not my desire to avoid appearing foolish in public. Why foolish? Because Iomega needed about 2 million units a quarter in 1997 to reach it and, through Q1, had increased the deficit by 3/4 of a million or so. There were not 6 million drives sold by the end of Q1 at all. Because we know finished-goods and work-in-progress inventories aren't that large at Iomega, we know that they can't overcome this production gap in Q2 and Q3. There is, therefore, no way that Iomega will reach the 10 million plateau by the end of Q3. I don't believe retail sales of Zips have picked up over Q4 1996 at all. The price is essentially the same and more people now gets Zips through new PCs than did back then. I think retail sales are actually down in the U.S. and won't soar until the price hits $99. I think run rates are around 1.5-1.6 million in Q2, with a high estimate by me of 1.8 million. Iomega will be lucky to reach 10 million Zips this year, when what they should have done is guaranteed it by making the price points happen sooner and dedicating the whole company toward reaching that goal. Also, 2 million a quarter, on average this year, would've represented a doubling of last year's Zip sales. 16 million in 98. 32 million in 99. 64 million in 2000 and by 2001, they've got the whole market. That would've been a nice progression, doubling unit-sales every year. Not gonna happen. Occam Copernicus "10 million Zips by September. It's obvious!"
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