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Monday, March 23, 1998 Friday, Iomega closed at $7 1/16, down 3/16 (-2.59%). THIS WEEKEND'S RECAP: Iomega's stock price continue to swim in the doldrums, and message board posters found a plethora of topics to examine in an effort to understand how the stock and company have gotten to this point and where they might go from here. Some of the issues taking center stage included Jaz2 shipping, CD-RW drives, clik! and even buses. 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++ Waverunner with info on Iomega buses.
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 3/19/98. 1+++++++++++++++++++++++++++
Subject: Those Buses FWIW, those Zip buses driving around Chicago grab your attention. And it appears that they run the buses on different rotating routes. The last three days the schedule has the thing driving by my business about every two hours. On this bus -- http://members.aol.com/Waverunner/zipbus.html The picture was taken with a Mavica. 45K resolution. Also, fwiw, when the person I know in the upper hierarchy of the computer business was asked today what was wrong with Iomega, he said there is a stockholders lawsuit. Guess he doesn't see anything or hear anything wrong in the channel. Not in the USA, and not with the Zip. 2+++++++++++++++++++++++++++
Subject: Buz/Jaz2/Managment Buz was being demoed at J&R Computers yesterday and today. J&R is one of the biggest computer stores in NYC. I went to take a peak. The Buz was being run off of Jaz2. Nice little crowd watching. A few Buzes in stock. The quality on screen was herky-jerky. I asked why it was not full motion. He said this was a function of the computer, but that no data was lost. He said that after a video clip was edited, it could be transferred back to videotape for storage and TV playback, and that there would be no lost frames. Other folks (early adopter types) asked a lot of computerese mumbo jumbo questions, which, I am sad to say, I couldn't even come close to interpreting. As to Jaz2... "Is it shipping?" "Uhh, not quite." "When?" "Probably about a month." Great. So a few drives have slipped out the door to a few people, as CayugaDan said he had them in his store. But it seems that anything resembling volume is still.... I'm too disgusted to finish the statement. They made the mistake once in Q4. Did they really have to repeat it in Q1? Aren't great managers supposed to learn from their mistakes? The company needs managerial help/changes. They need it today. Now. Not tomorrow. 3+++++++++++++++++++++++++++
Subject: CD-RW?!? I have long considered this technology to be meaningless for Iomega's prospects. It was way too late to market, coming as CD-ROM was set to disappear into the sunset in favor of DVD. Well, instead, DVD has best stood for Dearth of Visibility Disks, there is nearly no software, DVD-RAM/+RW is in utter chaos and then this remarkable stat: "In the meantime, users are increasingly opting for CD-RW drives (the rewritable version of the CD-ROM) as a mass-storage medium. HP, Philips, Sony, and others are projecting that more than 6 million drives will be shipped this year, up from 2 million in 1997, and that 15 million units are projected to be shipped in 1999." Holy guacamole, Batman! Most CD-ROMs shipped today can now read the CD-RW format (the newest model for late 1997 and 1998) and all can read CD-R. Despite the drive's high price and mediocre performance, it appears that CD-RW is taking off. It makes an OK backup device (650MB per cart is pretty good at $25 per CD-RW disk) -- nice size to do a full data backup, or a full apps/Windows backup. The CD-R media is nearly free -- $1-2 per disk -- and allows for great archives (the best of all in my opinion) not to mention custom "mix" CDs, piracy of Playstation games, etc. At $320-700, these drives are not cheaper, but apparently someone who makes them plans on steady price reductions over the next 24 months. If they really sell 15 million of them in 1999, we can guarantee a singificant chunk of those are going to be OEM sales. We know that there is almost no aftermarket product that could sell in those volumes, especially at those prices. While CD-RW is no Zip, no Jaz or no Ditto, it does present an intriguing consumer option for someone considering any of those devices. It's a great archiver (better than any Iomega product), it's easier to backup with than tape or Zip (bigger size than Zip, random access unlike tape), it makes a great pre-mastering solution for CD making (better than anything, period), it's cheaper by far on media than Jaz (4 cents/MB for CD-RW carts withprices like to fall quite a bit / <.25 cents/MB for CD-R!). It's not as fast as Jaz, but faster than Ditto and in read speeds comparable to Zip. The write speeds are still pretty slow, but for backup / archive / transfer these aren't super-duper critical. Eventually, it could fit where the CD-ROM does now without adding an extra device (nice in laptops someday, perhaps?).... Can costs be driven down to CD-ROM levels? I dunno. Does this represent yet another threat to the Zip standard? I'd say maybe... 15 million in 1999? That's Iomega-type numbers... 4+++++++++++++++++++++++++++
Subject: Re: CD-RW?!? Mark, I'm glad somebody's finally picked up this thread. I've tried starting it several times but no one seems interested. The fact of the matter is, while CDRW is little or no threat as a floppy replacement, it is a considerable threat for the function of a backup device for the reasons you mention above. What does this mean? TIE RATIOS. WHERE THE $$$$ IS GENERATED. I posted a link a while back that DVDRW is set to be out in small quantities this summer, and gradually ramping after that. Since IOM's delightful advertisements push Zip as a backup device, the availability of CDRW and its forthcoming drop in price has got to look interesting if a consumer is interested only in backup. I know, I know, Zip is for backup of FILES, not a whole hard drive. But the average consumer doesn't know that. Why won't they say "hey, Iomega's right, I should back up my "stuff". but I can't fit more than a fraction of my 4gig hard drive (not everybody REALIZES it's easier to just back up data) on a Zip disk, and here's a CDRW drive that holds 6x more, and ooh, a DVD drive that holds 10gig!" Also, anybody who is using Zip/Jaz for HD backup right now probably uses a LOT of disks. I've heard stories of people who have a Jaz disk for each day of the week. Now let's say they convert to CDRW or DVDRW. Where do the tie ratios go? DOWN. Say people who have digital video/audio/pictures stored on Zip/Jaz want to permanently archive it onto something. "Let's see, a Zip ($10), a Jaz ($80), or a CD ($.25)? And what if I want to send a copy of the digi photos of the baby to Aunt Mabel? She doesn't have a Zip yet. Looks like a CD!" What happens to tie ratios? DOWN. CDRW has no chance to be a floppy replacement, and are therefore no threat to ZIP. But I am convinced they are a significant threat to IOMEGA, because they will steal disk sales and therefore profit. Maybe this is a moot point and nobody wants to talk about tie ratios (it's the disks, stupid) being cut from this new competitor. I say that's a shame. 5+++++++++++++++++++++++++++
Subject: Jaz2 Venting Rant OK, I know Insights numbers and dates don't mean squiddle. But, yesterday there were 200 and some Jaz2 externals due to arrive by the first of April. Now there are (8) externals, yes (8), due MAY FREAKIN FIRST...(insert deep breath here) 1998 though. so we got that going for us. If Jaz2 has problems... which I'm sure it does now.... Lets hear 'em. I remember hearing Jaz1 overheated a bit more than some were comfortable with... would Jaz2 run hotter? The internal Jaz2's are down to one left. So we've sold (10) there and (10) at CayugaDan's...There are thousands of Jaz2 carts sitting in inventory killing us for goodness sake. SG&A should be less about the salaries of at least a couple of the folks who can be fingered for the fiasco. I can't blame the new guy, as he inherited the problem. I'd like nothing better than for whoever is in charge of this @*&$#% up to show up in a SyQuest press release as head of some soon to be &%$#@$*ed up launch there. If Jaz2 doesn't ship volume until late next Q.... ouch. I mean Geez, thats when external clik! is scheduled to be delayed for a Quarter or three. Maybe the Zip shipments should be delayed so as not to screw up morale and confuse the new corporate culture we see emerging. It appears my medication has worn off. Anyone know if you can heat up Prozac and inject the liquid directly through the temple into the brain? 6+++++++++++++++++++++++++++
Subject: Re: CD-RW?!? Rob states: << CDRW has no chance to be a floppy replacement, and are therefore no threat to ZIP. But I am convinced they are a significant threat to IOMEGA, because they will steal disk sales and therefore profit. Maybe this is a moot point and nobody wants to talk about tie ratios (it's the disks, stupid) being cut from this new competitor. I say that's a shame. >> Rob you made a lot of on its surface logical and sound arguments, however, if it is the disks, then why does not that "maxim"also apply to CD-RW Mfgers.? Can they make all or most of their money from the CD-RW drives alone. I don't think so. This technology has been around for several years. Why hasn't it taken off? Go back about 1 1/2 to 2 years ago. This subject was discussed to infinity here. Their market is archiving, video games, and the like, not everyday use for home and business, IMO.This would be great for archiving, games, video, & maybe movies on a CD, but way to slow for everyday business or home use. End of story. 7+++++++++++++++++++++++++++
Subject: Two cents Recently there has been well voiced dissappointment based on the performance of IOM stock price and management performance. A dark cloud follows this stock which has taken the form of worries over potential competation, lots of short sellers, lack of support from print and media journalists and lack of coverage from investment firms. This has been magnified of late following the recent earnings warning. The main disappointment appears to have been from the expectation that once IOM developed positive earnings it would always continue. This was and will be an overly optimistic expectation. Consider the following: 1. IOM is an early growth company that will need to sacrafice earnings at the expense of keeping to the long range business plan. Thier business plan is simply to have Zip as a new floppy standard and develop a line of tape and disc storage solutions. 2. The struggle to develop a new standard is risky with bumps along the road. Try to think of other companies that have achieved this smoothly with positive earnings. Remember when AOL was at $14 a share pre-split last January when there was nothing but busy signals? Bumps along the road for IOM are to be expected. 3. This earnings suprise may only be due to market conditions beyond IOMs control since there is all around weakness in PC hardware as demonstrated by INTC, Micron, the drive makers and others. Dell has been the exception and they may also see some future weakness. If they do is it Dell management or market conditions? Do we throw out the management of other tech companies experiencing weakness now? 4. I think the important item to watch is if the percentage of inclusion in OEM sales is rising. The total PC sales can be down and less drive units can be sold but are more people asking for Zip as part of the box. The arguement can be made that the sub $1000 PC buyer may not want a Zip but at some time they will and this may represent future demand for after market drives. 5. Look at the IOM products and determine if they are unique and fill a need. Zip meets this criteria. I tried not to use my Zip for a week and I couldn’t hold out more than 3 days before I had to save a 5MB file that had to be on a floppy. 6. Why is the ls-120 failing or at best struggeling? Poor performance or Zip installed base is already to high? If the reason is the latter then all new challeges to compete with Zip are welcome. I need to hand my Zip disk to my friend or co-worker who has a Zip drive. At this point I don't really care what the new drives do. 7. IOM has made clear the ability to sell drives at $99. Where would IOM fair today if there was a similar product out there at $99 when they launched Zip. 8. New products will get covered and it is human nature to like the new kid on the block. Don't fall into this trap if it is merely a me-to product. There is alot for them to overcome. 8.I have no opinion on the quality of the advertising campaign but I know many non-techie people buying, trying to decide or deciding not to buy a Zip. There is a product awareness and that is the purpose of the campaign- not more Zip disc sales next Tuesday. 9. Clik will be and important product. People like the size. 10. There has been difficulty in launching new products but many who are critical seem to assume IOM has unlimited resources. Take the criticism of the late Jazz II launch. If it were launched earlier and used resources that would reduce shipments of Zip to OEMS is that path perferred. I doubt this can be answered until we see how things work out but the given the existing resources within IOM the current path may be the perfect balance. This is long enough. 8+++++++++++++++++++++++++++
Subject: Re: Clik! Connects To PC Thru Serial Port? (Was Clik..) In responding to a SECOND recent computer news article (there may be more that we don't know of) reporting that "clik! connects to PC through serial port", I posted and wrote: << .... Readers of this will wonder why anyone would need a clik! or clik! camera because most digital cameras now with some flash memory can already download images to a PC through the serial port. What a joke!!! ... >> (I said a lot more in that post and in my many other clik! posts) Ken2Marcus responded: << If you only take one flash card worth of pictures, you don't need clik. If your family ever goes on vacations and don't want to take your PC along with you to constantly download the pictures to it, then clik is needed. EIther clik or $1000 of flash memory. >> Ken2Marcus, you can make a much better case than that! Not just the incremental huge cost savings of additional clik! disks over flash memory cards. There may be also more convenient clik! connections to PC through faster interfaces that enable computer operations on images, if occasionally needed later, to be done directly on clik! drives and disks, making downloading images to another type of drive or disk unnecessary. Clik! camera users may have the huge convenience of just taking snap shot images directly onto inexpensive clik! disks and just leave them there for good. One Step Image Capturing & Storage. Unless clik! is not a better product than most people currently realize and not the better product which I thought clik! would be and ought to be (and I will be diappointed), Iomega should make a better case about clik! than they are making now. Maybe just like when talking about Iomega: build the earnings number (ironically we don't even have that now), and they (investors) will come, Now, "don't worry about what the writers report about clik!, we can't monitor all of them anyway, just build a good product and the customers will come"? First one article, then another one, then ..... Misinformation may turn into facts? And maybe even Iomega would then say: Oh, the outside world doesn't expect us to do much anyway, maybe we can save a few more bucks and all the trouble and just use that serial port for a clik! drive to connect to a PC ..... If a company doesn't want to make sure the world know about the best features of its products, then don't blame the world for not paying enough respect to the company or its products. One Step Capturing & Stoage.....Clik! ....We keep memories alive. _______________________________
End Report. Posts covered through 9:00pm ET 3/22/98.
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