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Monday, March 30, 1998 Friday, Iomega closed at $7, up $1/8 (+1.82%). THIS WEEKEND'S RECAP: A slight move in the Iomega stock price was met with relative indifference over the weekend. Message board posters instead focused on the company's status after Kim Edwards's sudden resignation earlier in the week, on the advertising campaign (including offering suggestions and even scripts of 30-second television spots) and on the overall competency and future of IOM Others shared information about the Zip becoming a standard component in some computer manufacturer's boxes and even on the share holdings of Iomega's Board of Directors. 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++ MarkRogo responds to the suggestion that Microsoft use Zip disks for
Windows 98.
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 3/26/98. 1+++++++++++++++++++++++++++
Subject: Re: 3b-10b << So let me get this straight Mark, seeing ZIP on the box of All those boxes with windows98 software will have no effect on ZIP sales? Come on man. Do I have to spell it out? >> Um no, Pete, you don't have to spell it out. The motivation is Iomega's to do this, not Microsoft's. My point is that Microsoft has NO REASON TO AGREE TO DO THIS. And nothing Iomega could do would change that equation for a nanosecond. Sorry. << Secondly, I Think 50 cents is closer to the true cost for a ZIP disk. >> You are mistaken. << Have you ever had a CD go BAD? Let me guess you don't have any out of their case as we speak. >> I have several out of the case. None have ever gone bad except my Turnstiles CD that was in a portable CD player when my car overturned 2.5 times 7 years ago. << Case in point, market the disk for what it is, a safe way to keep data. If I have the choice to buy Win 98 on one or the other I will buy it on a Zip DISK. Microsoft would do it because it is "state of the art." >> Pure unadulterated nonsense. The CD gives them 650MB of unalterable, uncorruptable space for a cost that is literally less then $1 per disk for Microsoft. The Zip is alterable, corruptable and too small. And there is no way in hell Iomega could sell the blanks to Microsoft for <$1. So try a new scheme, 'cause this ain't it. 2+++++++++++++++++++++++++++
Subject: Apple ad vs. Iomega ad Last night I saw the new 'Apple G3 Toasts the Pentium' ad twice on TV. (a guy in an Intel clean room 'bunny suit' and a fire extinguisher puts out a burning Intel chip while the 1973 disco hit Disco Inferno is playing in the background) If you've seen this ad you'll be laughing your head off, but also will come away with the one point Apple was trying to make, the Apple G3 chip is up to twice as fast as the Pentium II. Iomega needs to totally redo their ad campaign and come up with a similarly simple and entertaining ad making the one point: 1 ZIP = 70 Floppies I saw an Iomega ad for the ZIP in Business Week. You had to read through several lines of small text to get to the line 1 ZIP = 70 Floppies. Couldn't they at least have put that simple phrase in 48 point bold type somewhere at the top of the page? With all the ad clutter today a company has to make their point quickly and clearly. The Iomega ads don't do that! I can think of many humorous situations where having to move a huge file requires a huge stack of disks. They are fumbled, dropped, etc by a hapless employee in an embarassing and humorous situation; while another employee shows up with his 1 ZIP in his hand, cool, calm and collected. I'm not an expert on ad creation, but gee, look at these Iomega ads! We remember them because we're interested in the company. But, the average person won't remember them for a minute. It's your stuff??? What the heck's that mean?! The first thing the new CEO should do is fire the ad agency and get one with some originality. Don't settle for a campaign that won't have everyone talking because of it's innovation, originality and cleverness....and about the one point we need people to know; 1 ZIP = 70 Floppies! 3+++++++++++++++++++++++++++
Subject: Re: Apple ad vs. Iomega ad - 70 Floppies << we need people to know; 1 ZIP = 70 Floppies! >> ...... so that they will go down to CompUSA and find out that one LS-120 disk = 83 Floppies and buy the LS-120 instead? NO !!!! Iomega should advertise the more than 12 or 13 million Zip Drive installed base (compared to competitions' one or two million?), therefore the ease of moving big files among friends, peers or between places using Zip disks, and the wide availability of Zip DISKS and various Zip disk packs at almost all retail computer stores; everyday low price advantage of aftermarket Zips or OEM Zips; and the superior performance of the high capacity operation and reliability of the Zip (compared to the backwardly compatible drive or floppies)..... Yes, Iomega can also simply tell consumers why they need a Zip drive: if they have files larger than 1.44MB each and want to download them easily, or want to move a whole directory with many files totalling more than 1.44MB at a time conveniently, they need a Zip drive..... (Can have an ad to show the frustration of trying to do those things by shuffling lots of floppeis.) 4+++++++++++++++++++++++++++
Subject: Re: The Good and The Bad Of Iomega's core competency, markrogo opines: << I don't think the competency is what you say, either. I don't think it was consumer-lifestyle marketing adapted to a boring niche. It was a breakthrough price/performance product at $199 for Zip. Then it was a then breakthrough price/performance product of, what, $499 for Jaz. >> We could argue about that and still be on, essentially, the same wavelength. Technology companies usually sell what they do because the engineering is feasible, and not necessarily because they have any particular insight regarding consumer needs. Ignoring the fierce thread here last year about "Engineering-versus-Marketing", I'll contend that Iomega initially got its "marketing" right and let the technology form-factors and price/performance packaging for Zip and Jaz follow. << Now, we get anti-breakthroughs on price/performance. >> Well, perhaps from the perspective of shareholders of companies who're accustomed to seeing high-tech products follow "Microcosm-ic" semiconductor-like yield principles and extremely short shelf-lives, this observation might be expected. In that light, I agree it's heretical to offer a next-generation product that costs more than its predecessor; new developments are always discounted to the degree they deliver cost/performance breakthroughs. But if we have to evaluate every "Iomega" that comes along using those rules, then no new entrant will ever deserve a higher PE than, say, Seagate. (And a safe bet nobody would post here ten or twenty times a day for such a company. ; ) ) But try telling this to a consumer marketing powerhouse, the sort of company Iomega was until recently attempting to become. Outside Silicon Valley and its slavish incantation of Moore's Law, there's a whole world where brand names stick around long enough to carry premium prices. Perhaps wrongly for a spawn of the PC revolution, the old "New Iomega" thought it could introduce Zip Plus and Jaz 2 at those "bone-headed" pricepoints because its brand equity was strong enough to support them and there wasn't much evidence of competitors eroding the marketspace beneath them. Maybe Iomega's marketeers didn't know they were supposed to give the consumer a better deal every 14 months or whatever. The company's entire experience during all but about three months of the Kim Edwards era was that its brand equity did a pretty good job supporting premium price positions while competition foundered and that pricing was a component of planning, not panic. Rightly or wrongly, Edwards and his team would have asked themselves Why give that model up without a fight? << Imagine what would happen if SyQuest got a big company with resources to buy it. What would become of Zip Plus at $199? >> Good point, and I'm sure you'll think of plenty of other doomsday scenarios to support the contention that stupid pricing is the root of our current mess. (I really like the asteroid thread somebody had going a week or two ago!) But I'll concede: against that hypothetical threat, Zip Plus would probably face sustainable price pressure and need to be adjusted. << Iomega did some weirdo stuff to push up tie ratios. Way, way, way too tangential. >> I enjoy your posts, Mark. You've got just the right mix of ascerbic wit and bombast to sound authoritative on any subject and, providentially for someone who posts as often as you do, you can write. Lately, you've had some powerful things to say. But as you relish a good run in the Bully Pulpit, remember that hindsight is benevolent that way. Few Microsoft investors would consider mice and keyboards a worthy use of their capital if those gizmos had to carry pricepoints typical of the retail aftermarket. (As with Genuine Iomega Brand Zip Disks, its the brand that makes them so expensive.) Of course, with so much evidence of Iomega's comeuppance at hand, it's not surprising that a smidgen of hindsight colors our arguments. Conditions in the PC peripherals and storage markets are very different than they were twelve months ago, a time when Iomega's planning for the products you currently disdain would have been fairly advanced. The fundamentals, as they say, are subject to change. But if hindsight tells us that a better course would have been to milk the high-tech price/performance curve and not invest in line extensions and brand equity, I'd like to know who'd have had the courage at Iomega to follow a virtually bankrupt SyQuest into the abyss? For all his failings, I don't think we can hang that on Kim Edwards, making him an easy target for pundits now that market conditions look rickety and the new products superfluous. Not incidentally, I'm completely out of Iomega for the first time since 1995, more because of renewed uncertainty looking ahead than rancor over past disappointments. KE's grace-less departure and those bizarre insinuations coming out of Roy that, sans-Edwards, the company will follow a $10Billion trajectory instead of a paltry $3Billion one, leave me wondering who's smoking what and whether they've somehow lost the secrets of their youth. If that's the new mantra and change is truly in the wind, an Engineering Iomega is not nearly as interesting to me as a Marketing Iomega. 5+++++++++++++++++++++++++++
Subject: Re: Monday's news http://cnnfn.com/digitaljam/newsbytes/109749.html Comments? 6+++++++++++++++++++++++++++
Subject: Re: why insiders buying huge According to the annual report there are 10 directors. According to the Proxy statement we are only electing 8 directors. Two of the ten are resigning -- William Andersen and Michael Kucha. As an aside -- why is iomega reducing the number of directors? Or did these resignations occur too recently to find candidates for the proxy statement? We also now know another director is resigning -- Kim Edwards. I do not know how many shares the directors owned previous to the Proxy Statement, I would have to go back to past year's statements and it is too late right now to do that, but here are the shares owned by each member as reflected in this year's proxy statement: William Andersen -- 9,160 (resigning) Robert Berkowitz -- 2,000 David Duke -- 0 David Dunn -- 23,981,726 Kim Edwards -- 1,320,419 (resigned) Michael Kucha -- 151,032 (resigning) John Myers -- 14,320 John Nolen -- 120,000 John Sheehan -- 80,000 James Sierk -- 0 (interim President) These numbers only reflect shares owned, not shares acquirable within 60 days (through the exercise of options). _______________________________
End Report. Posts covered through 9:00pm ET 3/29/98.
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