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Thursday, March 05, 1998 Wednesday, Iomega closed at $9, down $3/16 (-2.04%). TODAY'S RECAP: Iomega message board posters fixated on the Zip drive and its competitors (existing and proposed). SyQuest and, more extensively, Sony, were both discussed as to competition potential, sales and more. Also, there was some questioning about IBM's new 1-inch 400MB hard drive as a possible contender against Iomega's forthcoming clik! drive and disks. Enjoy! INDEX: Use the Search or Find feature of your word processor to locate the article number (Find: 1++, 3++, etc.)
1++ Warren5550 ponders SyQuest and it's current status in selling media.
Recap written and posts compiled by TMF Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 3/2/98. 1+++++++++++++++++++++++++++
Subject: Re: fortune magazine pumps syquest as No1 Be aware of the shares outstanding and shares to hit the market from SYQT suppliers and contractors paid in paper as opposed to cash. What SYQT cheerleaders are failing to comprehend is that a removable disk can't win by simply being cheap in terms of cost/mb, it must have a near commodity unit cost - like 9 or 10$ retail (or less) so that users can be cavalier about passing disks around and purchasing more disks. SYQT is selling products at a gross (as opposed to net) loss. Even with this drastic measure, they can't touch the unit cost per disk (zip). As IOM reaps the benefits of large scale production, costs drop, leaving room to increase margins or lower prices, or split the difference. Ask yourself, can SYQT beat a $100 million ad blitz? The tech geeks already know what they want, and tend to buy according to specifications: SYQT (and others) can win some of these people, but IOM is taking aim at the whole pie as it grows. Exposure will win. I have personally experienced trying to sell a technically superior product to purchasing managers who went with poor, yet adequate and well advertised technology. They did this because the competition had marketed the heck out of the product and created consumer awareness and strong demand. What does this mean to the product manager? They don't have to sell the thing. It sells itself. The path of least resistence. IOM is greasing the entire channel, top to bottom, far more than the others, "superior" technology and all, can afford to. SYQT was a good quick play back when it went from $3 to $18 on IOM's coatails, but that was before the current IOM successes and SYQT's financial skyscraper of cards. 2+++++++++++++++++++++++++++
Subject: euro mag ad I saw a full page Iomega add for the Zip in the German magazine Stern today. 3+++++++++++++++++++++++++++
Subject: Re: HiFD in April? I am continually amazed how everyone is so completely willing to accept ANY other storage device as better than the Zip drive. So far we have.. Orb, Sony Hifud, Syquest, Writable CD's, Re-writable CD's, DVD, Shark, and of course the mega hit LS-120. Yet all these devices put together haven't sold as many units in their entire history as IOM has sold Zips in the last quarter. Everytime some yahoo farts out a press release about a new super duper wiz bang storage product, it is instantly declared the ZIP KILLER!! Hell you don't even have to have a working drive to be declared the Zip killer. So far every storage product I've listed above is going to kill the Zip. If this is true we will have about 10 new mass storage standards. The only device that everyone is sure WON'T be the new standard is in fact the only device that is the new standard. We keep hearing about how everyone else has better technology than Zip. Well I'm probably a pretty average computer user and I know one thing. My Zip drive works everyday. I turn on my computer and there it is. I am a quadriplegic and I drop my Zip disks ( from drive to desk is about 18 inches) almost EVERYTIME I take them out of the drive. I have had a couple of times when my Zip drive (internal, from micron) wouldn't eject the disk. Having limited use of my hands I quickly resort to the " hit it hard on the side of the box " method of disk removal. I've only had to resort to that method about 2 or 3 times but after almost a year, drive and disks are all fine. So sure the Zip drive is not on the cutting edge of technology, but the fact is it works. I wonder how many of you Zip naysayers out there are driving a BMW, or a Mercedes, or Range Rover. I KNOW your not driving a Chevy, or a Ford because those cars aren't on the cutting edge, and anyone who demands that their computer storage device must be the cutting edge would never allow themselves to drive a car that isn't. Thats why those VW's were the best selling car ever. All that cutting edge stuff that was crammed into them! 4+++++++++++++++++++++++++++
Subject: Re: HiFD in April? << If Sony comes out of the starting gate with a thin factor HiFD ready for laptops and notebooks, it appears to me that it will be a serious competitive factor. My question is, can a huge company (Sony) with deep pockets (this is not Syquest) build a better product than Zip, sell it at little or no margin, gain a huge portion of the laptop market, and then leverage that success with OEMs to eventually displace Zip? >>
IF
IF
IF
IF
IF
IF
IF Then yes, they will be serious competition for the Zip. That's an awful lot of IF's 5+++++++++++++++++++++++++++
Subject: Re: Sony HiFD address << "o3.6 MB/s maximum transfer rate (read) o1.2 MB/s maximum transfer rate (write)" ..ahh, the plot sickens..:).. ..note the published 'write' figures from sony's web page.. ..and the read figures, are probably to the drives onboard cache.. ..I'd bet this drive will not be significantly faster then the Atapi Zip drive.. >> Not only that, but these are maximum transfer rates, meaning when the disk is reading on the outermost tracks. On the innermost tracks, speed will be much, much lower (reads of about 600K). FYI, Zip Plus' transfer rate is 1.40MB max and .79MB min, beating the HiFD's read speeds. In other words, the Zip is faster. 6+++++++++++++++++++++++++++
Subject: Re: HiFD in April? You all are mad and sarcastic at MacBare for his HiFD post. But he has been a solid contributor and a raises a good subject for discussion. How about easing up on him a bit? HiFD, if it becomes available (and I thought for some reason they already announced a delay until later in the year?) really sounds like LS-120 except faster and with some more disk space. If I own a laptop or I am going to buy one soon, a 3.5" comes with it already. I need it. About once every three months, but I do need it. I certainly don't care if I have to swap it in every three months. I also could buy a laptop Zip drive and still be able to use the 3 1/2" when I want. The Zip is compatible with 13mm other drives out there, the HiFD would be compatible with none. MORE importantly, the Zip is compatible with my INTERNAL Zip drive at the office, and my external Zip drive at home. I would need 3 HiFUDs to replace everything. Not likely. Oh, and BTW. When I hit save, the damn Zip drive saves. Retrieves when I say so, too. I don't sit around waiting for it. So even if another drive was 50% faster, I don't think I would notice much. So, many users out there have Zip - they would have to render their Zip disks useless to convert to another drive in their new laptop. Why would they? 100MB is enough for the average user. Desktops have 3.5" anyway. And remember, IOM makes bigger headway into the OEM boxes everyday. Nobody is backing up their whole systems on Zip disks. They are backing up their data files. Sounds like HiFD won't be any faster than laptop Zip, according to other posts here. Of course, maybe, like Imation, they will claim that it is much faster. Sony does have deep pockets and a good brand name to make a big marketing splash. It is illegal to dump drives but they could still try it. Yet, do you notice that Iomega and Zip have huge brand recognition in this market already. And the advertising blitzjust builds on that, which would help future sales vs. new competition. Also, FWIW. They need to make a laptop Zip compatible with Dell. I am amazed at how much more you can get for your money on a Dell laptop (catalog came in the mail last night). No wonder Dell's sales are growing by leaps and bounds. I am still buying Toshiba, though, so I can use laptop Zip with it :). Also also: why would the whole removable storage industry switch to Swan UHC for 30 more MB? 7+++++++++++++++++++++++++++
Subject: Whitman....great post David, Your post is dead on accurate. The only super floppy technolgy that has produced sales and profits is the Zip drive. Everytime someone issues a technology announcement, the demise of the Zip drive is predicted and chiseled in stone. So far Iomega is the only company that has produced a product that is reliable, offers a familiar interface and is popular with consumers. Since the introduction of the Zip drive, Iomega has continuously improved the product, brought the cost down and increased production. Approximately 4 weeks ago John Dvorak in his column in PC Magazine predicted that the Sony HiFD was going to destroy Iomega and the competition. In the current edition of PC Magazine he now predicts that Castlewood's ORB will destroy......Iomega....lol. Well at least we dont have to worry about Sony anymore...lol. The columnists love to root for underdogs and/or find something new to write about in their columns. I am still waiting for that DVD revolution that was going to sweep us away...lol. When Iomega first started selling the Zip drive we benefitted from positive press, now everyone looks to knock us off. I watch carefully all emerging technologies and products but until I see a product that sells in the retail channel and is reliable, durable, popular and can be produced at a profit (unlike Syquest) I am not going to panic. One last note I find the recent spat of articles by Paul Festa, Jim Louderback dishonest journalism to say the least. After writing them and discussing their articles the responses from them demonstrate a complete disregard for the facts and being even handed in their approach. Iomega has experienced some problems with their drive but it is less than one percent yet they totally ignore competitors such as Syquest. Internet boards are full of posts complaining bitterly about the Syjet, SparQ, etc. I have recently subscribed to www.insidertrader.com (subscription $49.95 a year) in which they have a research report on Syquest discussing huge failure rates and products being sold at a loss. Somehow this is deemed unimportant to report. In the 3 plus years I have owned Iomega I have seen mistakes by management and been disappointed more than a few times. In particular I do not like Iomega's adversarial attitude towards Wall Street nor their inept Public Relations or Investor Relations departments. However that said they are still the odds on favorite to be the next standard and a very profitable company. 8+++++++++++++++++++++++++++
Subject: Clik-ing dead (on arrival)? The saga of the Iomega clik continues with news that, quite frankly, I find staggeringly bad for Iomega's hopes... http://techweb.cmp.com/eet/news/98/997news/shows.html Some of you may have heard about this product, but I'll share some highlights from the article for those who haven't. By Rick Boyd-Merritt PASADENA, Calif. -- IBM Corp. disclosed work on a 1-inch hard disk drive at the Mobile Insights conference here yesterday. The matchbox-sized prototype drive, which fits into a new form factor defined by the CompactFlash Association, could carry as much as 400 Mbytes and cost $200, if IBM moves ahead with plans to produce the drive next year. My stars! We're talking .50/MB, which compares favorably with Clik.
"We have interest from digital camera makers, and we think that could be a first application. Beyond that it could go into smart cellular phones or consumer appliances we might not even imagine." And at 400MB, it could go places where Clik cannot.
But IBM's goal is to have a working technology demonstration at Comdex/Fall for a product that could ship in 1999, he said. And they discuss how none of this technology is new at all. It's just "shrunken" existing technology.
Current plans call for ... the aim of ultimately offering drives that scale up to a Gbyte in capacity and down to $99 in price. So you mean you're going for .10/MB? Holy harshness, that's less than half a clik cart!
"Our goal is to focus on manufacturability, not on pushing the leading edge of areal capacity with this product," Healy said. They want to be able to build them, not impress people with their technology.
"We think the market has fundamentally changed," said Healy. "This is a consumer drive. Manufacturers of motion MPEG cameras are already interested in using this, although their volumes are small. But we think we can move this to a mass market." So does Iomega. Which offering is more compelling? IBM appears to be targeting the same market -- high initial cost, low per/MB -- as Iomega is. Only they are gonna have better performance, larger capacity, etc.
The drive is being designed to fit in a new 5-mm high version of the CompactFlash socket defined by flash-card maker SanDisk Corp. That format uses an ATA interface and a PCMCIA-like socket. Uh oh. Can you do this with a clik drive? I don't think so, but I admit I could be wrong. This means, folks, that any device that takes CompactFlash would just need to have the slot widened to the new 5-mm standard. I, obviously, think this is tremendously bad news. With no clik sales to speak of this year and with probably small volumes in 1999, let's say IBM goes out at $100 in 2000 (take a loss on the first few units). Clik drives may come in at half that, but that's not a given. In the meantime, IBM doesn't need OEM adoption to produce an elegant solution (Iomega does need OEM adoption for an ELEGANT solution). They simply need the industry to move towardwide Compact Flash slots (very easy for some, will happen so long as SanDisk tells people its a good thing for bigger capacity flash cards). Clik is looking more like a non-starter to me. I certainly wouldn't be adding EPS in my calculations due to it. Unless, that is, the drives go to $40 and the disks goes to $5. And at those prices, what are the margins? (And where is the 80MB Clik)... _______________________________ End Report. Posts covered through 9:00pm ET 3/4/98. _______________________________
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