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Wednesday, February 18, 1998 Tuesday, Iomega closed at $9 3/16, up $1/8 (+1.38%). TODAY'S RECAP: A news release from Imation -- announcing the selection of the SuperDrive over Zip by Ernst & Young -- fueled responses from a number of posters, as did ~RitkouskiP~'s suggestion for Zip disk usage (selling software). Other posters addressed Nomai and patent infringement and the whole notion (and pros and cons) of backward-compatibility. 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++ RitkouskiP proposes a "new" use for the Zip disk and drive.
Recap written and posts compiled by TMF Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 2/16/98. 1+++++++++++++++++++++++++++
Subject: Disk Benefits First, two requests: 1) Someone more eloquent than I am (maybe TMF Jeanie), please find a way to express the following thoughts in a concise, easy to understand form. I have trouble being concise and so this post will probably be ignored by the vast majority here. 2) To “get” what I am trying to say in the following paragraphs, you will have to “unlearn” or suspend what this board has taught you over and over again about “software not being distributed on Zips”. Ok, ready? - Since the quarterly report I have been trying to decide, in my own mind, whether the key component in the business model, disk sales, were going to be jump started by the present ad blitz. We all agree that growth in disk sales needs to increase to keep us on track, plus pay for the extra expense of the ad campaign. - Something TMF Jeanie posted around the time of the Superbowl about “selling the benefits” struck me as ringing true. IOM must show the common joe out there the “benefits” of the Zip drive and, more importantly, the Zip disk which is the true money maker. - My point here (finally!): I suggest that IOM take an innovative approach to increase Zip disk sales. I would like to see joe or jane sixpack walk into the local Walden Software and see the “benefits” of a Zip disk staring him or her in the face (Reserve judgment! Keep reading!). I am not talking about “software as we know it”. We all agree and it has been beaten to death on this board that Zip is not a cost effective way to distribute software programs. What I am talking about is software programs built around the benefits only possible with a Zip. This is software that 1) has a main purpose of letting the user create content, 2) causes them to create lots of content that takes up lots of space, and 3) causes them to create content that they want to share with others. - Iomega has made a tentative first step in this direction with Record-it, but I personally haven’t seen this software program packaged slickly with a Zip disk and staring me in the face at the local software store (I am probably wrong because I live in an area of the U.S. that is kind of behind the times, so such a package may exist). - The easiest way to explain what I am talking about is an example: Quake, the new sequel to the very popular game, Doom should NOT be distributed on a Zip disk. BUT, the software that lets game players create there own Quake/Doom levels illustrates my point quite nicely: I am joe sixpack junior walking into the local Walden Software. There on the shelf is this really cool software program that will let me create my own levels, monsters, weapons, etc. for Quake and Doom (I am already bored with Quake. I have memorized every level of the game). Wow, it seems that part of the package is that this software comes on a new disk that has lots of storage space. Cool! Mom and Dad would get really upset if I filled up the hard drive with all of the new levels I am going to create! The back of the box says I need a Zip drive for the disk? Never heard of it, but it says right here that if my computer doesn’t have an internal drive, I can purchase an inexpensive external drive. Also says that I should be able to exchange the new levels I create with all my friends because there are 13 million Zip drives out there. Cool! The new levels I create would be too “space intensive” to fit on a regular floppy, but with this new disk they have included, won’t be a problem! I guess I will buy this now, and go get mom and dad to spring for a drive. - Ok, now consider the same idea in several different arenas: those 3-D architect (house plan, deck plan) software programs, photo album software, teenage girl games which allow the user to create and store content, etc. The point is to concentrate on the “benefits” that the Zip drive provides and build around that. No one would argue that the Zip doesn’t work for conventional software distribution. IOM needs to think outside the box. They need to think about what software programs they can build that will highlight Zip benefits, that will cause someone who has never even heard of Zip to buy the program with the disk, then go out and buy the drive. - Right now, IOM has it backwards. They are trying to convince people to buy the drive and then figure out on their own what they would use the disks for. Can you say LOW TIE RATIO! Think outside the box. Turn it around. Give people a reason to want to buy the disk(s) because it is a necessary part of a killer software package that gives them the ability to do something really cool (which just so happens to require lots of storage space), and they will go get the drive as an afterthought, because they have to to get the “full benefit” of the cool software program they just purchased. - I am not creative, but this board has creative minds in abundance. Someone out there has a “killer ap” which would highlight the benefit of the Zip drive and disks. - IOM would have to work with several different other companies to co-package the product or products (or whatever the technical term is). Might be more than IOM could pull off. Anyway, I am probably way off base and rambling on, but would like others to comment on this. Let me know what you think. - If the goal is to educate the consumer, my money is on giving that consumer a reason to use the disks, a tangible, undeniable benefit, rather than spending money for television ads that tell the consumer what a Zip drive is and then hoping they will figure out on their own that they “need” one of these things for backup, or whatever. 2+++++++++++++++++++++++++++
Subject: Re: Disk Benefits << Trial versions of major software titles on Zip disks would be just as good an idea. >> I would take this whole idea further. Iomega could develop special point-of-sale packaging to hold a single Zip disk while simultaneously offering vendors enough label space to advertise, promote, or otherwise compel purchasers to buy the disk. Give the simple packages free to software developers, let them print the inserts and distribute the products through their normal retail channels. I would even let them put their own labels on the disk itself provided the Zip logo remains. I would guess the existing margin on disk sales would cover the cost of the package, and each package would involve the purchase of a Zip disk, so the cost to the company (and us) would be negligible. And think of the mindshare Zip would get if individual disks were hung at checkout stands with labels from a wide variety of software vendors, but all containing the stylized i. This would further cement the Zip as the standard in consumers minds. 3+++++++++++++++++++++++++++
Subject: Re: Ernst & Young On its face, I would say this doesn't appear good. Perhaps a closer look is in order: << Ernst & Young will specify SuperDisk drives as its internal drive component of choice in both desktop and notebook computers for use by its globally mobile staff of consultants. >> Note they do not say they are recommending SuperDisk drives to their clients, only their own consultants. If I stretch my mind, I can see how it might be useful for mobile consultants to be able to read clients' floppies. Then again, I'd bet that their clients computer already have floppy drives. << Additionally, the company has already placed an initial order for more than 2,000 Imation SuperDisk Parallel Port Drives for its U.S.-based staff. >> 2,000 drives!! Wow!! (That's about 1 1/2 hours worth of Zip sales.) ;-) << "With its performance advantage...>> Compared to what? This is one of the most common tricks used in advertising...making comparisons without stated what the product is compared to. For example, food products that boldly claim "1/3 less fat" and never tell you what they compared it to. We already know the SuperDisk is slower than Zip, and it has been reported as slower than a regular floppy reading 1.44 meg disks. When it's reading its own 120 meg disks, it's faster than a classic floppy drive reading a classic floppy. That's about it. << It meets the growing demand for capacity while protecting the availability of existing information stored on 1.44 MB diskettes -- two important criteria for any business user." >> Same old argument for backward compatibility. I find it hard to believe, personally, that Ernst & Youngs mobile sales consultants have difficulty finding 1.4 meg floppy drives when they need them. This is Imation's PR department talking here, trying to fear of Zip in the minds of business, by implying that products without backward compatility don't meet certain "important business criteria." 4+++++++++++++++++++++++++++
Subject: FORTUNE Most Admired... Folks- Haven't seen this mentioned here (sorry if it has been), but in the March 2nd issue of Fortune, Iomega is listed as one of the "Most Admired Companies" in computer peripherals. It ranks 4th on a list of 8, behind EMC (1), Western Digital (2) and Seagate (3). After Iomega, it's Lexmark, Quantum, Storage Technology and Maxtor. Surprisingly, Syquest is not on the list. Darn. 5+++++++++++++++++++++++++++
Subject: Re: Copyright & patent infringement question Rob writes: << "Wilken did not rule on separate claims of copyright and patent infringement filed by Iomega against Nomai. A hearing on those issues is set for Feb. 27 before Martin Jenkins, another U.S. district judge in San Francisco, an attorney for Nomai said." As I see it, the copyright & especially the patent infringement ruling is the real problem facing Nomai. Since the Nomai disks are considered somewhat compatable, here is my question. For the Nomai disks to be (in any way) compatable, wouldn't there have to be some type of patent infringement by Nomai, which might include types of and location of parts inside the disks (which would have to be similar), mirror/vs/retroflective (terminology does not make a part different), etc. I have dealt with the U.S. patent department on several occasions. First, how could Nomai get a U.S. patent for their disks since it is extremely difficult to get a patent for a product similar to one with an existing patent, especially in the U.S. Secondly, does Nomai have a U.S. patent? And thirdly, how could Nomai's disk work without infringing on Iomega's patents? Personally, I don't see how Nomai can win on the patent infringement issue (I could be wrong). Can I be wrong? It seems as if this Nomai thing is really hurting IOM's stock price (market sentiment especially). Comments (especially from Ira) are appreciated. >> Glad to respond... Not in any particular order... (1) Nomai does not have any patents on their disk. (2) In order for the Nomai disk to be fully compatible with the Zip disk (I believe) it will have to infringe on one or more Iomega patents. (3) The present Nomai disk may not infringe on Iomega patents (I haven't seen the disk, so I can't speak with certainty), nor does it have to in order to work in the non-laptop Zip drives. Why do I say this? Although there are a number of patents covering the Zip disk, most of them cover minor details that improve production yields or reliability (key concept!!). The main patents (IMHO) are the retroreflector patent (5638228) and the patent for stabilizing the spinning media (5537281). The retroreflector patent covers a specific type of reflector. An "ordinary" mirror is not covered by the patent and will work in a specific geometry such as exists in the "larger" Zip drives without infringing on the patent. The laptop Zip uses a different sensor geometry, (thus requiring a different mirror). The beauty of the retroreflector is that the same one works in any geometry -- no need to design special disks for laptop or desktop use. The stabilization patent (again IMHO) is at the crux of the compatibility dispute. If Nomai does not infringe, then their disk is most likely not stable under rotation. The lack of stability will lead to collisions between the heads and the media, ultimately damaging the disk, drive, or both. It may be possible to stabilize without infringing on the patent, but I don't think it will be easy. For further details on both of these issues, you may want to look back at posts in the September-November 1997 period written by AuntArctic, Jimmunroe, ClayHagan, and me. 6+++++++++++++++++++++++++++
Subject: Senseless 1.44M B.C.Talk? (Was Re: Ernst & Young) RichWhite9 posted: << ... If you cannot understand the advantages of having one drive perform both 3 1/2 and Superdisk tasks, then it is senseless to even talk with you. This feature has been, and is, the only strength of the Superdrive when compared to the Zip. If the IOM engineers took as flippant an attitude about compatibility issues as you do ( and could have designed it as backward compatible, but didn't since it would be easy to dredge up a 3 1/2 drive somewhere) then IOM is truly in the wrong environment. Backwards compatibility is always desirable in a business system, whether hardware or software. The features of a non-compatible system have to be overwhelming so that all legacy systems should be rendered obsolete or converted to the new system. The Superdisk eases the path of migration. ... >> No kidding !!! May I ask, what was there to help you ease the path of migration from 5.25" drives to 3.5" 720KB/1.44MB drives? Did you have one of those very rare and late coming 3.5"/5.25" two in one drive units which were never sold well at all? Zip is much more overwhelming when compared to 3.5" 1.44MB than 3.5" 1.44MB was to 5.25". Why didn't you find a need then but find a need for a two in one backwardly compatible drive (but has only one slot that can only take one disk at a time) only now? You said: "If you cannot understand the advantages of having one drive perform both 3 1/2 and Superdisk tasks, then it is senseless to even talk with you". Although some IOM bulls may find it equally senseless to talk with a person who preaches the need for 1.44MB backward compatibility in a new high capcity drive, I beg to differ. Very briefly, the reasons for no 1.44MB backward compatibility need: 1. Most existing computers already have 1.44MB drives. 2. Cost of Zip drive + 1.44MB drive in a new system may be close to or even less than a 1.44MB backwardly compatible high capacity drive. 3. 1.44MB backwardly compatible drive has only one disk slot: For those who think they will still work a lot with the old 1.44MB disks when using the new high capacity drive, the available 1.44MB backwardly compatible high capacity drive has only one disk slot. You can only put one disk, one kind of disk, either a 1.44MB or a high capacity disk, one at a time, not both at the same time, into the backwardly compatible drive. Unfortunate, isn't it? 4. For those who think in their heads that they will still work a lot with the old 1.44MB disks when using the new high capacity drive, a Zip drive and a seperate 1.44MB drive will be a much better solution. They can have a 1.44MB disk disk spinning in the 1.44MB drive while having a Zip disk in the Zip drive, both at the same time. They will be very happy. 5. More chance for both drive features failing at the same time in a backwardly compatible drive. Less chance for both a Zip drive and a seperate 1.44MB drive to fail at the same time. 6. 1.44MB disk is becoming less useful and fading away as files are getting bigger. 7. Some 1.44MB backwardly compatible drives may not be able to format 1.44MB disks. So, you may still need to have a seperate 1.44MB drive anyway. And if you have a seperate 1.44MB drive, and there is a good chance you do have it already, why would you need that backwardly compatible feature, or need the 1.44MB backwardly compatible drive itself at all (if 1.44MB compatibility is the only reason why you want the 1.44MB backwardly compatible drive instead of a Zip)? 8. 1.44MB backward compatibility may unneccessarily complicate the drive/head mechanism and constrain the performance of the high capcity function for very little gain in useful feature, if any gain in useful feature at all (please see reasons above). I am sure I have missed some other good reasons. This is one example of the stuff that a stronger Iomega sales force should be well educated on. You thought everybody understood the no need for 1.44MB backward compatibility issue a long time ago. But .... A stronger and better educated Iomega sales force can in turn go around visiting and "educating" big corpaoration buyers & users and chain store buyers & salespersons about "Why Zip Not Competitions" in general terms without naming any competitions by names loudly. _______________________________ End Report. Posts covered through 9:30pm ET 2/17/98. _______________________________
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