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Wednesday, January 21, 1998 Tuesday, Iomega closed at $12 5/8, up $9/16 (+4.66%). TODAY'S RECAP: Iomega's impending 4Q conference call sparked no end of discussion yesterday, but much of it was coupled with speculation about IOM's Superbowl advertisement(s). Other posters commented on Iomega's appearance on web pages, in advertisements, on television and in new coverage by Soundview Financial. 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++ Duuwhee comments on Iomega's strategy for the Superbowl ad.
Recap written and posts compiled by TMF Weekly. _______________________________ And now, the Best of the Board...Started 9:01pm ET 1/19/98. 1+++++++++++++++++++++++++++
Subject: Re: IOM & Super Bowl It is written: << do you really think its time to advertise a non-existent product to the masses? >> It depends. If you are certain that products will launch, behind closed doors agreements are final. Then Yes. Why not keep the clikkers clikking? I am pretty sure Iomega is marketing clik! in a fashion that is intended to create a fad that they can leverage into a trend. Take that trend and burst into Main St. Keep the momentum going. Get customers to start asking the potential OEM's when this new clik! is gonna be out. (I dunno if I'd use the Super Bowl for it though.) Launching Zip was nothing next to clik!. The logistics of penetrating all of the disparate market niches with clik! is daunting. Imagine all the sales reps... ooops "Evangelists" sorry, Iomega is going to need. The good thing is that clik! can point to Zip, Jaz and yes Ditto, and use those drives coupled with the Iomega brand as an introduction into the board room. Can you imagine trying to sell clik! cold 3 years ago? The only clik! you'd of heard would be the sound of the door locking after the receptionist slammed it in your face. I thought the cargo plane ad sucked. I'd rather some diverse group of owners just said Iomega Zip Drive $99 bucks gets you 100MB's over and over for fifteen seconds. Then says "or get Zipped by these computers" and fill the screen with logos. Play a little Jazz while the logos run and finish with some cool dude intoning something like "and power users should get themselves a little taste of the Jaz" Yeah baby its Iomega. Cheap, easy, to the point. Say Iomega about a dozen times in the ad. OK, mine sucks way worse... my ego can take failure... What ever..... Dump the CargoStar. I was half way through it before I knew it was the Iomega ad. And I was looking for it. Put the Zip Built In Logo on the screen at least. I'll bet the ratings for that campaign were low. The LA Times runs a weekly review of ad campaigns... that one got a single $ from me only because I can't get my keyboard to write 1/2$ 2+++++++++++++++++++++++++++
Subject: Re:University of Florida FWIW, my daughter's computer is on the fritz and she asked me to go into UF's website for computer requirements. As I was scanning down all the suggested parts such as monitor,HD size,etc. what did I see in the column for removeable storage?? A Zip drive of course. Just thought that was interesting as this was the main website for the University and there are 43,000 students there. 3+++++++++++++++++++++++++++
Subject: Dahlin Smith White iomega's Ad agency is Dahlin Smith White. For a history and background on DSW go to: Overview [http://www.dsw.com/overview.htm] Of note, since we now know that iomega will be running a SuperBowl Ad, is the fact that Dahlin Smith White did the "Intel Inside" theme. Form the DSW site: << Our "Intel Inside" work has helped Intel grow from technology unknown into one of the dozen most valuable brands in the world, ahead of such consumer institutions as Pepsi and Levis, according to Financial World's 1993, 1994 and 1995 rankings. Our "Seeing Red" campaign helped put Novell on the networking map in the late 1980's and our current "Its Your Stuff" work is transforming Iomega from the speeds and feeds backwater to mass retail prominence. >> 4+++++++++++++++++++++++++++
Subject: Re: IOM & Super Bowl Pat (TMFKeeler) raises the point: << However, the $1.3 MM is just the cost of the time. I'm sure Iomega will be spending maybe 1-3X that to produce the spot! The payoff for Super Bowl adds are to make the papers the next day. Re-running the cargo plane spot is not an option. If anyone knows what it costs to produce a top of the line 30 second spot I'd love to hear it; I personally have no idea other than the previous guess ;-) What if the spot is not one 30 sec. spot but a combo; 15 sec for Zip inside and 15 sec for Clik!? I would think that type of commercial would cost more than just a one topic 30 sec. spot. >> Pat, Sorry to disappoint you, but the commercial won't cost anywhere near as much to produce as it will to air. I would expect the cost to be about $250,000, but it could be much less or much more. It depends on how many "bells and whistles" they throw in. If IOM were to try something on the scale of the Apple "1984" Mac commercial (which was 90 sec. I believe) it would probably cost upwards of $1million. I would imagine that the IOM commercials which have aired to date were in the $100-200,000 range. 5+++++++++++++++++++++++++++
Subject: Buz status? I have been waiting for the Buz! I was dispointed when IOM web site had a date count and then it turned out to be the Click! Here are a few tidbits I gather which indicate to me that Buz is coming really SOON! 1. I sent a note to ask IOM about Buz availability date, they actually sent me a note saying "End of January 98". This was back in December. 2. PCZone catalog has a full page spread on Buz. I checked their web site, it says "Inventory expected 2/17/98" 3. CompUSA now showing Buz at $189.95. It says "Available for backorder" 4. Microwarehouse web site shows Buz available. When I called the salesperson told me they expect early March. Could the "Bermuda or Bust" postcard be the annoucement tomorrow that Buz is being shipped??? I hope so!! See, 'postcard' and phone processing using the Buz??? Can't wait and I think Buz will be a hit. But it is hard to understand how Buz will be a center part of IOM's strategy as Click would be. But I will love to use the Buz! 6+++++++++++++++++++++++++++
Subject: Re: DR. IOMEGA wants questions for CC After reading this list of questions from "another world" ;-) I have to say there is something to be said for having professionals on the calls LOL Half the questions we know Iomega does not answer; the other half assume things that just aren't factual. For instance: << 21) Is Power consumption a fatal flaw of the Clik!? >> Yes, Iomega is dumb enough to have the computer press to the Rainbow Room, get major players like Matsushita, Fuji and Kodak to endorse and/or license the technology, spend all of Comdex promoting the product, because it has a fatal flaw and will never see the light of day. How about these: << 6) Will Zip2 read Clik! disks? 9) How much will Zip2 exceed the Sony proposed 200 MB drive by? 10) When Zip2 is available will the 100 MB disks approach $6 per disk retail? >> How can you ask a question that assumes something that is not even true? Wouldn't you feel silly asking a question like this? Personally, I doubt we will ever see a Zip 200 drive. Once again I'd also like to remind people about the answer to this question that continues to pop up: << 19) What ever happened to the "Zip on a Chip" project with the multiple mfg. partners that was announced over a year ago? Are we going to see something come of this pretty soon? >> There was never a "Zip on a Chip" project. Somebody on this board once posted the speculation that maybe somebody could develop this. It was discussed so much that people started to assume the discussion was about an actual news item I guess. Iomega is committed to lowering the number of semiconductors in the Zip drive as a cost saving/production enhancing measure. Nobody from Iomega ever discussed a one chip Zip drive. I believe its impossible or at least impracticle. Iomega continues to work with all the vendors mentioned in that press release; except possibly for Intel. Last we heard they were working on architectural issues but Intel would not be doing ASICs. I believe MOT, NSM or TXN took up the slack easily. There were some questions that might get answered: << 2) I heard that the screws on the ZipT disk have recently been replaced with rivits: Was this done to reduce the cost, or is there another reason? 5) When will second source drives be available? 7) Will Iomega support USB bus in '98? 17) Are there any plans to introduce a lower capacity Zip disk that smaller s/w distributors won't find cost-prohibitive? 20) At what percent of manufacturing capacity is Iomega operating? 27) Review the status on the laptop zip, status on smaller version ( 12 mm), 98 advertising campaign and has it met sales expectations ? >> #2 is most likely trivial at best. I doubt KE would know #5 and if he did he would tell us (I assume the question is about licensees as Iomega has two sources already). #7 is also trivial. #17 is no, Zip disk can never be as cheap as a CD-ROM. #20 is not as important as the info given last time about actual production capacity of 14 million Zips. #27 is two good questions. We've been frustrated by the lack of insightful questioning by analysts in the past. I thought they did a great job last time and KE was also more willing to add details. Having KE spend his time on the 30 questions the people on S.I. came up with would be very frustrating. KE only has to do it once a quarter, poor Stillings has to do it every day :-( Don't get me wrong, I think its tremendous that people can formulate 30 questions to ask. We should all strive to understand the companies we own enough to come up with 30 questions every quarter. However, some realism is needed and the understanding that world peace will not break out no matter what Iomega reports ;-) 7+++++++++++++++++++++++++++
Subject: Re: IOM/SBXXXII/denver << Proof that IOM has the opportunity (cash -wise) to play with the big boys is interesting. Especially in light of the fact that there is an outside chance that the Broncos could keep it closer than 13 points. >> Hmm... it just occured to me that Iomega must have had to commit to this well in advance of knowing which teams were going to the Super Bowl. The network must have been selling this time slot months ago. I'll even venture a guess that the el primo slots in the first quarter and half-time are spoken for a year in advance. So it's always a wild card for the advertisers. Now for the really important question -- which team do I root for? To my thinking, it should be the underdog in order to keep the game exciting enough to retain the viewers right to the end :-) Note to TMF Keeler: The production costs for this spot have already been expensed. Maybe in Q4, but we don't know that it didn't happen in Q3 (which I suspect). It's impossible to guess the cost - some spots can cost as much as the airtime, but since Iomega probably didn't hire Michael Jordan or Tiger Woods as a spokesman, I doubt they spent that much to produce it :) Also, the media cost of a 15-sec spot is not half of a 30, just as you can't buy two 30s for the price of a 60. Besides, the fella at Dahlin Smith White told me it's a 30. Thanks to Robert for replying to my question about when they might expense the media cost. Q1 sounds reasonable to expect. 8+++++++++++++++++++++++++++
Subject: "A world-class company" I didn’t see a post on this so here it is-from the WSJ “Year End Review” 1/2/98 page R24. A 1/4 page ad of which 1/2 is a great picture of the “big guy” sitting at at a desk with a Ditto, Zip, and Jaz drive along with respective cartridges on the desk top. The following ad was placed by the Treasury Management Association. The comments are from Edwards. << “If you want a world-class company, you need a world-class treasury.” “When Iomega introduced the Zip™ and Jaz® drives, not many people would have bet that we could grow sales from $141 million to $1.2 billion in just two years. We've now shipped more than 14 million Zip™, Jaz®, and Ditto™ drives combined. Our treasury has played a vital role in this remarkable growth by spearheading two critical public offerings, providing asset management that yielded positive cash flow in each of our last four quarters, and establishing a new revolving credit facility. All in a span of 18 months. One things is a sure bet--that’s a world-class treasury.” >> Below the TMA logo running across the lower portion of the ad is the following: << TREASURY EXECUTIVES: ENHANCING CORPORATE PERFORMANCE >> 9+++++++++++++++++++++++++++
Subject: Coverage from Soundview A friend told me that Soundview Financial instituted coverage of Iomega at 10:43 Eastern time today with a short-term buy and a long-term hold. Six-month price target: 16.25. Earnings expectations: 1997: $0.44; 1998: $0.65; 1999: $0.84. 10++++++++++++++++++++++++++
Subject: Re: Iomega Bermuda Sweepstakes ChrisProhm asks: << Does this mean we are going to see more than one new commercial on superbowl Sunday? >> The Superbowl ad is the seed, the follow up spots are the water. I remember Apple's 1984 Superbowl ad. I also remember wondering where the rest of them were. Regular advertising after the big Superbowl spot should keep Iomega in the minds of consumers. TMF Keeler: << The payoff for Super Bowl adds are to make the papers the next day. >> Great idea! Maybe an ad in the WSJ, just to reinforce Iomega in the minds of the business world. I am hoping that ad will be as catchy as the Clik! clickers. 11++++++++++++++++++++++++++
Subject: Mark Hamill on ".com" featuring Zip... FYI Fools- << Mark Hamill, star of Star Wars will host a new episode of the ".com" series this weekend. In its third season, the series explores the latest technological innovations and the rapidly evolving Internet landscape. Hamill regularly anchors the ".com" series, which is produced and paid for by TV Interactive, a highly acclaimed independent producer of original programming. This upcoming episode airs on CNBC, Saturday, Jan. 24th at Noon Eastern Time. Feature Stories Include: (SNIP) Mass Storage As Standard Equipment...In the past, the solution to storing huge software files involved upgrading your hard drive. All that changed with the introduction of mass storage devices like Iomega's Zip Drives. They're on desktops everywhere. Now, the Zip Drive is taking the OEM market by storm. (SNIP) ".com" is a magazine format style television program hosted by Star Wars celebrity, Mark Hamill. Each segment can be viewed in its entirety through streaming video on TVI's Web site, www.tviweb.com. >> Very cool. 12++++++++++++++++++++++++++
Subject: Re: Coverage from Soundview << A friend told me that Soundview Financial instituted coverage of Iomega at 10:43 Eastern time today with a short-term buy and a long-term hold. .... Earnings expectations: 1997: $0.44; 1998: $0.65; 1999: $0.84. >> $0.44 for 1997 implies an estimate of $0.15 EPS for 97Q4, which is in line with other analysts. Actually, $0.15 EPS for 97Q4 is exactly the mean and also the median for all estimates according to First Call. Those expectation numbers, if correctly quoted, are pretty good: From '97 to '98: $0.44 to $0.65 represents an estimated EPS increase of 48%; From '98 to '99: $0.65 to $0.84 represents an estimated EPS increase of 29%. Given the fact that analysts are usually much more conservative for estimated numbers further out in time (such as the estimate for '99), these numbers are not bad at all. I think the current IOM stock price hardly reflects these kinds of realistic but very conservative estimates (in my humble opinion). It seems to me that some investors don't think that Iomega can achieve any of these numbers, not even the $0.15 EPS for 97Q4. Otherwise, the IOM stock price should be higher now. Of course, I think they may be wrong. But again, what do I know? _______________________________ End Report. Posts covered through 9:00pm ET 1/20/98. _______________________________
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