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Monday, March 16, 1998 Friday, Iomega closed at $8 5/8, up $1/8 (+1.47%). THIS WEEKEND'S RECAP: A slow move in the stock price mirrored the goings-on in the Iomega folder over the weekend. Message board posters continued to discuss some of the same issues from earlier in the week (IOM stock buy-back, SyQuest and Sony competition) as well as price points for the Jaz drives (1 and 2). Another topic finding some play was the potential role digitial cameras might play in clik! sales. . . and vice versa. As is wont to happen on the board, there were also assessments of the company's current and future situation -- and its ability to be represented on radio. As one poster indicated (paraphrased): "It's okay for Iomega's media (disks) to be secretive, but why be secretive with the media (press)?" 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++ RPaul350CI posts the URL for a Jaz2 review.
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 3/12/98. 1+++++++++++++++++++++++++++
Subject: Jaz2 review Review of Jaz2 - didn't see this posted before. FWIW. http://www.zdnet.com/products/content/pccg/1104/291210.html 2+++++++++++++++++++++++++++
Subject: Re: Jaz2/Jaz1 What possible reason could they be, Patrick, that some exogenous factor would suddenly cause massive increases in Jaz 1 internal drives? It's not price, where the $20- cut was welcome, but nothing compared to the cut on externals. It's not marketing, where nothing has changed in the last 3 weeks. I'm sure if there are shortages, it's due to the bullwhip effect in the channel. Jaz demand had plummeted in December due to Jaz 2 chatter and SparQ and such. The channel was loaded. Over time, the channel has become unloaded. The orders, however, are placed ahead of time through Ingram et al., which was hearing nothing from retailers for weeks, and was causting Ingram et al. to order very few. Small changes in demand take a long time to propogate up the supply chain. This is the "bullwhip effect" and causes spot shortages and/or overcapacity for NO GOOD REASON. If the Jaz 1 internal is in short supply, there is nothing particular that needs to cause that, just the accumulated effect of the past 3 months. The only exogenous factor I can come up with, ironically, is that if SparQ's are not available at all for the first time since November, that would cause Jaz 1 to pick up due to substitution. That may be going on. The point is: none of this matters much. Jaz 1 is an important contributor to earnings, yes, but not anywhere near as important as Zip. Minor pickups in demand this late in the quarter won't change the quarter's results by even a penny. If, suddenly, Jaz 1 demand had permanently increased, then we would see an important sea-change for Iomega. That, however, is unlikely to occur without much more signifcant pricing action, probably including Jaz cartridge prices as well as the drives. 3+++++++++++++++++++++++++++
Subject: Re: Clik Market..was Re: Jaz2 review MNNML posted: << There is an easy way to determine what the effect of Clik will be on the bottom line (at least the best case scenario). 1. How many digital cameras are expected to be sold in the US on a yearly basis? >> CayugaDan responded: << If you're looking for best case scenario, you have to remember that clik! is designed for all KINDS of digital devices.... so a best case scenario (modifying your formula) would take all digital devices sold in the world yearly.... >> I may want to add. The digital camera market itself may grow drastically too. I think the digital camera market today may be held back by expensive Flash memory cards and the inconvenience of needing to upload to computers. Clik! drive and inexpensive clik! disks may be part of the force needed to finally "liberate" the digital cameras from expensive and inconvenient Flash memory, and (to a much lesser degree) from computers --- a clik! digital camera USER may not even need to own a computer. Not that digital cameras shouldn't be connected with computers. It is a very very very important feature of digital cameras. It may just be pleasantly ironic that while clik! drives may make it easier for digital cameras to connect with computers and for digital cameras to work better with computers, clik! digital cameras may also make owning computers unnecessary for casual camera users before they can USE digital cameras to capture, view and store images. I have explained these points in details in my previous posts. Now, maybe for the best of best case scenarios, as far as photo applications are concerned and limited to photo applications only, it would not be too far-fetched to ask: How many 35mm snap shot cameras, between the prices of $250 to $500 listed ($200 to $400 street) are sold each year and how many rolls of 35mm filmes are being sold for snap shot purposes each year for the time being? And how many more of them will be sold in the future if the conventional photo processing is simplified? Clik! drives/disks may simplify the conventional photo processing and distribution methods and may have a chance to tap into a part of the traditional snap shot photo market and grow. Clik! drive/disks may boost digital camera sales and even the whole snap shot still-photo market. Everything could be growing together. Of course, none of that has been figured into Iomega's current or future stock prices or estimated earnings and none of that should. Not until we see the clik! drives actually come out and how they sell. Clik! .... To Capture & To Store. .... we keep memories alive .... 4+++++++++++++++++++++++++++
Subject: Re: Seeds and skunks Tyler writes: << IOM is very quietly and without fanfare assuming full and total control of the removeable storage market. >> Bingo Tyler! great post! It's not a question of if, it one of when and the answer is: it's happening now, as we speak. This reality may be hidden from the investment community, and the now I speak of may extend for months into the future, but from what I can see Iomega has succeeded amazingly well in creating and growing this market. The supposed threats to Iomega are blown up to bigger then life size when in reality they are all but non-existent. It's called FUD.... Sony doesn't even have a product yet, but the FUD stirred up over them insists that their offering will be so superior as to force Iomega to abandon ship. Swan? well.... they've been touted as the doom of Iomega since late 1995, and still they haven't shown a product, will they? It doesn't matter, but FUD keeps them in the game and FUD actually wants you to believe they are ahead of the curve. The formula for success in the floppy replacement catagory has already been developed. The marketplace has decided, it's a 100Mb floppy because 100Mb is big enough without being too big. There is no economic way for someone to create another product and displace the one we already have. If zip had basic design flaws, or was less then rock solid from a use standpoint, i'd be the first to standup and shout Look Out! LS-120 suffered from these flaws and many of us here relentlessly pointed them out, time has proven that we were right regarding the fate of the LS-120. I am confident that we are just as right about the zip and Iomega. Clik! has been given no less of our critical eye, and in my opinion it is going to be a major success in the market, replacing film is only one catagory where Clik! will succeed. Both Zip and Clik! are revolutionary products but they will follow an evolutionary path to ubiquity. We have a year or so before Zips evolution is complete and several more before Clik! crests the hill. But it's going to happen. Flash is cool technology and will have it's place in the market but Flash will never be a replacement for super cheap floppies. This is the way it is. Argue that flash is only 27x as expensive all day if you like, argue that it will get cheaper over time, i'll agree but i'll be compelled to point out that so will Iomega floppy media, and the curve will never be crossed. By the time any Flash media could compete for a consumers dollars against a Clik! there will be no place for it, Clik! will be everywhere. Argue the size of the market based on the best information available and i'll listen, but I'll point out that current market estimates are so low as to be laughable, and i'll easily produce evidence from past estimates to prove it. Some 4 billion floppies are out there, that number is meaningless when looking at Zip Disk potential, the digital revolution is just getting a head of steam, I can see a time in the future when Iomega is selling 4 billion Zip Disks annually, maybe that's 5 years away but it's going to happen. Computers are quickly falling in price toward the range of TV sets, the internet is providing a link from your desktop PC to every other computer user in the world. I believe that PC won't get as popular as TV's I believe that they will obsolete them completely and exceed them in numbers by a large factor. And I believe that Zip will be the floppy disk for at least the next 10 years. Looking at Clik! is tougher, but the marketplace will grow bigger then the one I forsee for Zip. How can it be that our move toward a digital world could progress much further without such products? A major drawback in the path of digital advancement today is the lack of a universal data and interface standard. Zip is not only replacing the floppy it is redefining personal solutions to coping with digital clutter, Clik! offers the chance for devices of all flavors to painlessly access the same data from any number of smaller and increasing popular devices, most of which haven't been invented yet. In 5 years we'll look back at our late 90's cell phones and PDA's and laugh at how barbaric they were, much like we can look back at the 386 PC's of the early 90's and wonder how we managed to get along with so little. The one thing that will remain the same is the bits and bytes we'll be crunching and transmitting on those devices not to mention storing will have grown dramaticly. Another thing i'm sure of is the human requirement to keep information in digestable sized chunks, which is why Zip is so useful in the first place. Clik! at 40Mb will prove to be about the perfect sized mini personal information storage media because it's manageable. That manageablity is the defining factor that will make the difference between success and failure. The trend is clear if you care to look for it. It's happening now. As we monitor the daily progress via this board we don't notice the changes. It's like having a kitten or puppy, daily contact over the months of growth is almost unnoticable, but if a friend stops buy they are amazed at the changes that have occured. This Company excites me to no end because it's a rare event to find a situation like this one and be able to follow it's progress while knowing where it's leading. 5+++++++++++++++++++++++++++
Subject: Re: Craig Crossman's Show The show ended a few minutes ago. The host usually runs the show like a 3 ring circus so it is hard for listeners to clearly differentiate between the different products. The 3 drive manufacturers represented were: Iomega (Zip, Jaz, clik!), HP various Sure Store), and Fujitsu (various MO drives). I was mistaken in my previous post; Syquest was not represented. IOM was represented by Jonathan Graham (Public Relations Mgr). One of the highlights was when the host asked each guest to state the price of their drives Graham added something like: "right now for $99 you can go to Best Buy and have them add a Zip drive to your new PC". It came across very well. A caller named Dale (fess up, Dale) called and asked which Laptops came with a Zip drive. This question stimulated some excellent discussion on the portability of Zip drives. The host raised a question about clik! and Graham mentioned it was for handheld devices such as digital cameras and that 40 mb of data fit on a "postage stamp sized" disk and rather than having to constantly be concerned about downloading pictures to a PC you could hold many more photos on a clik! disk. I don't know how big the audience is for this show but it went over rather well for IOM. The question I asked on the show was following up to a previous question asked about transfer rates. HP had stated the Sure Stores were about 8X and IOM said Jaz 2 was about 8.4 mb/sec. I asked them to put it in more of an apples-to-apples comparison and Graham stated the Jaz 2 was comparable to 20X. _______________________________
End Report. Posts covered through 9:00pm ET 3/15/98.
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