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Wednesday, February 25, 1998 Tuesday, Iomega closed at $9 1/4, up $3/8 (+4.23%). TODAY'S RECAP: Today's report offers both bearish and bullish arguments for Iomega -- as that's what was happening on the board yesterday. A recent ruling in a Dutch court ordered Iomega to remove the "light baffles" from its notebook Zip drives in Europe -- but some posters saw this as a positive note for the Roy company. Other posters dealt with the whole notion of offsite data storage (pros and cons) while others asked questions related to the viability of clik!, Zip and Jaz versus flash memory and recordable CD-ROM drives. 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++ PaulL73 shares Iomega "deals" in the mail.
Recap written and posts compiled by TMF Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 2/23/98. 1+++++++++++++++++++++++++++
Subject: in the mail In the mail today an offer from PC Mall: If you buy a 10-pack of Zip disks for $129.95 you get Kiplinger's Tax-Cut software thrown in ($39 value, sez ad copy). The mailing is a strong pitch for Zip disks with reminders of what buyers can use them for. Also, Dell's online build-your-own-computer feature offers Zip drives plus two disks for $99 as an option. 2+++++++++++++++++++++++++++
Subject: Re: Nomai ruling And I quote: << "The invention of the light baffle predates any knowledge on the part of Iomega concerning the XHD reflector. In fact, Iomega filed a U.S. patent application on the invention prior to ever learning about Nomai's intent to use a concave reflector." Beautiful. IOM being the manufacturer of the drive can make rip off disks useless with minor changes in drive design. This is why analysts have a 10%-15% penetration by others into the zip disk sales and even that is generous.>> Too bad the judge ruled that if Iomega uses the light baffle to "activate" the reflector in Europe, they'll be fined 10 million guilders per day. Folks, Iomega had better have another trick up its sleeve or Nomai is gonna be able to sell knock off disks in Europe for good. Seriously. 3+++++++++++++++++++++++++++
Subject: Re: Nomai ruling Mark, I don't believe the situation is as bleak as you picture it. Nomai has been able to design around the retroreflector patent by using a concave mirror which is tailored to the optical path length of the desktop drive. To make a disk compatible with the laptop drive Nomai needs to use a differently shaped mirror (or infringe on the retroreflector patent). The two Nomai disks will each be incompatible with the other type of drive. The light baffle which the Dutch court ordered Iomega to remove from the drive would make any concave mirror equipped disk incompatible with any drive which contained the baffle. Yes, this would have been better for Iomega. But, even without the light baffle, Nomai cannot make a disk which is compatible across the entire Zip drive line. Iomega can "advertise" this fact as much as it wants. BTW, I think the Dutch court decision is similar to two decisions in the US in the past: one involving the design of ink-jet cartridges for HP printers (early 1990s) and the other involving the design of the connectors on IBM mainframe peripherals (early-mid 1980s?). In both cases (HP/IBM) were restrained from making modifications which the courts believed to have the sole purpose of restricting a competitor's ability to compete. 4+++++++++++++++++++++++++++
Subject: LOL "Any claim that our light baffle design was implemented to prevent competition is simply untrue," said Keating. "The design of the light baffle into Zip notebook drives was found to be necessary for proper discrimination in the slimmer profile drives to prevent possible danger caused by inserting foreign objects into the drive." I haven't had such a good laugh in a couple of days. This is such bull and I can't believe anyone would fall for it. Think about it. The reflector is on the front of the disk so the disk has to be inserted before the drive can decide wether or not to accept the disk. So if I stupidly jam a 1.44mb floppy into the drive the potential damage is already done before the drive can look for the retroreflector. Iomega's logic is that I won't try to toast a grilled cheese sandwich in my Zip drive becasue it doesn't have a retroreflector on it. In case I'm too stupid to know not to put an untoasted cheese sandwich in my Zip drive, I'm supposed to check the bread for any sign of a retroreflector. Ut ohh, no retroreflector on Wonder bread, good thing I didn't stuff it in the drive, thank you Iomega for providing that amazing protection for my drive. OK, so now you say, no, no no, I just don't get it. What Iomega is doing is making sure that the drive doesn't spin if a "foreing object" is inserted since that could damage the drive. Oh, I get it now, well, that makes sence but it still leaves me with 2 questions. If the retroreflector is only to protect the drive (and not Iomega's bottom line); Why is it patented? And why so complicated? All they would need is something different than what already exsists. I bet a simple mirror would be cheaper than a retroreflector (not that either could cost much). Hey, we all know why the retroreflector is there and I'm all for it. But if this is the best Iomega can do to fend off an accusation of anti-competitive practices, well, it's pretty pathetic. for discloser purposes: I've been in and out of IOM for years. I was long for about a year at 9. Sold in January at 8 1/2. Made money elsewhere and am looking to get back in once the 30 days is up. I'll be happy with any price under 9. I wonder if IOM price will rise again after folks can buy back in after getting the advantage of a tax loss? 5+++++++++++++++++++++++++++
Subject: Great Iomeg info summary URL Hi Gang, Iomega's customer relations department has a great webpage for an over view of the numbers on Iomega. It was refreshing to this old bull and I thought some of the newer members may want to see some of the historical information on Iomega (the company, rather than the stock). HTTP://www.iomega.com/company/investor/irfaq.html 6+++++++++++++++++++++++++++
Subject: Re: Analysis of IOM - Bulls and Bears take note MBAspeak writes: << Nick, the internet IS a threat to removable storage and hard drives. Data warehousing is a growing industry. I know for a fact that StorageTek is pursuing this market. One of the VPs gave a presentation in one of my classes last semester, and he spoke of this. >> War, While I agree with your point that the internet should be viewed as a threat, my question is "How soon will it be a threat?". Granted, technology moves forward at a lightening pace now. But, the infrastructure (right word?) needed to make this happen might take 5 years at best. Whether it be phone lines or satellite or whatever, it will be some time (IMO) before rural Kansas can swap large files with each other let alone Los Angeles. And once we bridge that gap, we must face the "security" of having your important backup files in your own hand, on disk or tape, as opposed to "somewhere else" out on the net. It is my hope as a stockholder that, by then, IOM will have sold 100 million drives and billions of disks. And there is nothing to say that IOMEGA won't parlay their brand name and customer trust into becoming the leader in "internet storage" when the time is right. I would suspect that they're already planning for that day. 7+++++++++++++++++++++++++++
Subject: POP the BUBBLE Sorry to pop the bubble but Click may klunk. Moving parts are out . . . . . solid state is in. The first people to use digital cameras were professionals and I can speak from experience; the only thing that counts is reliability. PERIOD! The vast majority of all assignments are not reshootable. Even in something a simple as real estate shooting re shoots are not acceptable. Imagine shooting all day while downloading your images to the Click only to find the thing wasn't working. The track record of Jaz and Zip does not bode well for the Click. And besides If one follows the development of semiconductors they will understand that It's only a matter of time when flash memory will become cost effective. But this isn't why I visited the board today. Now that I have been using my CDR for a while I have come to realize that Iomega is following the path of Syquest. If Iomega belives that Zip and Jaz will become the standard of the industry they have not benefited from the lessons of all others who precede them. And of great concern, if they need Zip and Jaz to become the standard of the industry they are in for a rough time. I reserved several months of experience with the CDR before I made judgement against the Zip and Jaz. Just as I did with my Mag Op drive when replacing my Syquest, just as I did with my Syquest when replacing my first Iomega drive; the Bournelli drive. I will list a few benefits of CDR over Jaz and Zip. 1. As with all real world business I must consider COST first. I buy three 20 packs of CDRs for a total of 39 GIGs of storage. This costs me about 120 bucks. Jaz 1 gig $79 ea. X 39 = $3081 Jaz 2 gig $125 ea. X 20 = $2500 Zip .1 gig $10 ea. X 390= $3900 2. Compatibility. CDRs are compatabile with all CD readers, including music readers. CDRs are used in mass storage devices such as jukboxes. 3. Reliability. CDRs are solid state and therefore are not subject to mechanical failure. CDRs are not magnetic and as such not subject to magnetic fields. CDRs are gold or silver and therefore archival and not subject to oxidation. 4. CDs are UNIVERSALITY ACCECPTED. Vurtually all consumer PC and Mac sold today have CR readers. The problem for Iomega indeed the universal problem for all technology companies is time. By the time CDRs are cost effective Iomega will have run out of time. PS. On the subject of flash memory becoming the standard of the industry thereby displacing any chance of Click surviving. When Intel decided to drop there persuits in the memory business and per sue CPUs they basically did so on the basis of one fact. Moores Law states that all semiconductors will double in performance every 18 months and as such will cost substantially less to produce and will yield less profit per unit. With this knowedge behind them they realized that memory chips would simply become a commodity (root word of commodity is common). Intel realizes that flash memory will follow the same path of SRAM and DRAM and become all to common so they recently droped all plans to persue construction of a new fab in Texas. This Fab was slated to manufacture flash memory. They have not stoped work on flash memory but ended this venture due to the global overcapasity in the semiconductor industry. With over capasity comes price drops add this to an ever increasing need for flash memory and you'll have 40 meg chips selling for about 10 bucks verry soon! Please respond to my email if not to the board. All IMHO of corse. 8+++++++++++++++++++++++++++
Subject: Re: POP the BUBBLE << the track record of Jaz and Zip does not bode well for the Click. >> Uhhh...what? a fraction of 1% of Zip disks with problems and you think that's a bad track record? Or is it the Jaz disk problem that was done away with a year ago? Whatever. Your larger point makes sense, that professional photogs, in particular, prize reliability. But the more digital photo production has become -- no printing now, just digital imaging from film -- the better the results for newspaper shooters. With digital photography, used a little but more and more all the time, the quality of the media will be very important, but it will also be easily checked, on site for most shoots. So whatever advantages flashnight have over a clik1 or a clik! imitator I doubt would amount to much. _______________________________ End Report. Posts covered through 9:00pm ET 2/24/98. _______________________________
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