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Wednesday, December 03, 1997 Tuesday, Iomega closed at $32 5/8, down $1/4 (-0.76%). TODAY'S RECAP: Iomega's stock price has dropped a bit in the past few days, but message board posters have found other topics to discuss, most specifically the shipment of, sighting of and hands-on experience with the laptop Zip drive. Other issues include clik!, SyQuest, Bill Gates and investors in Iomega. Enjoy! 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++ Benjamin70 corrects an earlier post on PC and Zip sales in the US.
Recap written by TMF Weekly; posts
compiled by TMF Weekly. 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 9:01pm ET 12/1/97. 1+++++++++++++++++++++++++++
Subject: Installed Base Race Redux As Mark Rogo correctly pointed out, my previous numbers were based not on worldwide sales of PCs but on USA sales. Therefore, they were wrong. I apologize for the error and thank Mark for the pointer. BTW, Excel for Mac '98 is supposed to permit named equations (i.e., instead of =Sheet2!C19/Sheet4!D11 and the like, you could enter OEMZips/WorldwidePCs). I have come to praise Bill Gates, not damn him. Anyway, thanks Mark, and the error was ALL mine. To correct the numbers, we'll see a change in absolutes, but not in scope. To refresh, I was actually blasting the use of useless metrics for the sake of throning a new standard. I still believe that. However, I also think Iomega has made slow yet steady progress with OEM sales. Certainly slower than many here seemed to believe in posts early last year. The corrected numbers looks like this: Q4 '96 Q4' 97 WW PCs 21m 24m Zips 1.2m 3m Zip OEM % 10% 35% Zip OEM/PC 1% 4.4% To remind, the WW PC numbers are rounded IDC estimates, the Zips are my estimates, and the Zip OEM for Q4 '97 is my estimate. The rounded numbers show a marked increase in OEM penetration but 19 out of every 20 computers sold this quarter, by my estimates, won't come with a Zip. What I should have done earlier is make another assumption, that is, OEM Zip sales is distributed globally in the same proportion as Iomega revenue. Actually, it is probably more heavily weighted towards the USA, but why not see what it looks like anyway. We get about a 8% inclusion rate using a 65% weight (in otherwords, 65% of Zip OEM sales, like 65% of Iomega revenue last quarter, were in the USA). A significant difference from the worldwide number, but still, not significant. 2+++++++++++++++++++++++++++
Subject: Jaz in network I was talking to a tech rep today about replacing and installing networks. While talking, we discussed my needs (20 or so workstations) and what kind of server I was going to install (do I really need two servers? one for NT 4.0 and the other running exchange and proxy? I mean.....get real....is this MSFTs way of scratching INTC's back??? - but I digress). Without any prompting, he advised two things: one - tape backup even though I'm going for a 9 GB RAID 5. A "precaution" or "insurance" he said. And don't go for those DATs in my environment because IOMEGA is coming out with a bigger Ditto and you can just schedule the backup for sunday afternoons/evenings. besides, he said, you can just install a Jaz to cover your daily incremental backups. hmm... well, free advice is worth what you paid for it, but, as this was out of the blue and without any prompting by me, I thought that it was yet another sign that IOM has been doing a credible (very good, but not the best) job in marketing our products. And now for something completely different - I was also at Computer City today. No, this is not a channel check. But a story. As I was waiting for assistance with an upgrade chip for my elderly 486, I listened to a conversation between a rather frustrated owner of a Syjet and the tech assistance girl. I didn't hear all of it as the tech assistance guy helped me out near the end of the conversation, but apparently the Syjet owner had 3 defective disks and was rather irritated. He wanted to know if the disks were just fragile or something. Anyway, it looks like he's going to return the thing 'cause he was asking about Computer City's return policy.... As for me, I got one of those funky AMD 133 chips to stick in my ZIF socket. Boy that was easy. I had thought it might take all evening (at least thru halftime of the Vikings/Packers) but wow...15 minutes or so and here I am. 3+++++++++++++++++++++++++++
Subject: Info (was Re: Barron's) << What major supplier? Which poster? Why the mystery? Names... We want names. ;) >> I don't remember the specifics, only the price stuck in my head. It was one of the major mail order guys who make a lot of boxes in house. The poster also escapes me but I remember it was one of the more credible ones (otherwise I would not have had the number committed to memory). No mystery, I don't have a memory like an elephant. ;-) << From the Q2 '97 conference call transcript; FURTHER COST REDUCTIONS. They were asked, once they catch up, how much further they think they can cost reduce the Zip drive. The analyst indicated that they are estimating that Iomega manufactures for $65-70 >> Is that from a transcript or from the Fool synopsis? Quite a bit of difference. I'm sure TMF Debit is right on and I remember wrongly, but just wanted to point out that the synopsis is just that, not a transcript. Not everything is in a 10-Q or a press release. Sometimes information comes from less obvious sources. Sometimes its just the grapevine. You have to weigh where the info comes from and whom is passing it along. For instance, in reply to my post I got several IMs and an email saying that certain Fools had heard Dell pays $43 for an ATAPI Zip. Take it for what its worth. I tend to believe these price points because it fits in with Iomega's long range plans and, what I perceive, as a very aggressive effort to get "in the box." If I was really going to do a Sherlock Holmes routine on something it wouldn't be the exact average OEM price. It would be on how many disks IOM sells. There is an incredibly sparse amount of information on that. Except for a few times Tim Hill talked overseas and one press release, we have little information of any kind. Even guys with access to Ingram can't count disks as they sell too many and are too fluid. I think it defensible to say that Iomega has sold over 100 million Zip disks to date. However, any number between 80-150 million would be just as good as the info is so spotty. What did Tim Hill say right before he left (in a British magazine); that they had sold 70 million disks? That was last Spring I believe. 4+++++++++++++++++++++++++++
Subject: New Institutional IOM Ownership Pimco Advisors-Columbus Circle bought new position of 1,555,000 shs IOM qtr ending 9/97 (from 13F filing) Pimco Advisors-Cadence Capital bought new position 9/97 616,400 shs IOM (from 13F filing) Berger Associates new position 9/97 bought 348,200 5+++++++++++++++++++++++++++
Subject: Re: VST Ships New Models << Is it possible Compaq is offering the Shark because there aren't enough quantities of laptop zip available to go around? Maybe Compaq is next on the list after NEC??? >> This isn't NEC or IBM offering the laptop Zip but VST, a third party. VST could, concievably, offer a laptop Zip for any manufacturer's laptop, assuming they could fit it in. (it does help to have the manufacturer's help, however) VST is, however, probably going to go for the largest and easiest (from an engineering standpoint) models. Apple, Toshiba, and IBM are huge markets in the laptop field. NEC I'm not so sure about, and Compaq seems to be rebounding from a poor initial Armada release. However, these are AFTERMARKET sales, not OEM sales, and these models are offered by a third party so Compaq doesn't figure into the decision. You could call VST and ask them if they plan to offer a laptop Zip for Compaq. My bet is they will tell you yes, in time (they want you as a customer). 6+++++++++++++++++++++++++++
Subject: Bill Gates likes click! From Bill Gates' piece on what caught his eye at Comdex: "Other companies make tiny mechanical disks. Iomega showed hard drive the size of a matchbook. It's called ``Clik,'' and holds 40 megabytes of data _ about as much as 22 high-density floppy disks." He also mentions Sandisk. The entire article is at (big URL): 7+++++++++++++++++++++++++++
Subject: Finally...My Laptop zZp is here!! Hey, Sports fans, My CNF laptop Zip from CompUSA arrived today, and I must admit that I am impressed! It is like greased lightning(subjective testing) compared to the PP Zip I had hooked up, and compared to a 3 1/2" floppy, well.....we ain't in Kansas anymore, Totto! Installation was a snap on my Tosh Tecra 730CDT, (Win95). Didn't even use the floppy that came with the Zip. Fit and finish are excellent. No software incompatabilities that I can find so far. Nice job, Iomega and CNF. Any questions? _______________________________ End Report. Posts covered through 9:00pm ET 12/2/97. _______________________________
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