|
|
|
|
Friday, April 24, 1998 Thursday, Iomega closed at $8 3/8, down $7/16 (-4.96%) TODAY'S RECAP: Discussion of Iomega's annual meeting continued (thanks to NSCORAF), but new topics surfaced yesterday on the message board: Zip production capacity and the ability to become a standard; ZipPlus as a pro or con to the overall Zip market; and even the Sony drive's specs from COMDEX. 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++ NSACORAF provides part 3 of his annual meeting report
Recap written and posts compiled by TMF
Weekly. _______________________________ And now, the Best of the Board...Started 9:00pm ET 4/22/98. 1+++++++++++++++++++++++++++
Subject: Annual Meeting Part 3 of 4 Fred Forsyth, President Profesional Products Divison (Jaz 1 & 2) He is a very good speaker who is very confident and an "in charge" kind of guy. His operations are located in Santa Rosa (?) or San Jose(?) California. Here are some of his quotes: "Digital convergence occurring especially in the Jaz area." "JAZ is super fast and extremely vast." (Ad slogan) "Over 1.5 million sold." "Jaz 2GB - Twice the size and 40% faster." (Ad slogan) "We are now using lots of resources in cost reduction. Not done in the past." "BUZ - is the easiest multimedia production into and out of your PC. It gives you professional quality just below broadcast quality.... software included: Hot Shots, MGI, Recordit, etc...." "We go to all these shows for the Jaz market: 1. MIS/IT 2. CAD/CAM 3. Desktop Publishing 4. graphic Arts 5. Video 6. Audio 7. ? " "The Digital Creation Station of 1998 includes: audio, internet downloads, photo digital imaging, color printers, color scanners, video....." "Surpised at Park City Sundance Film Festival with so many film makers, editors, etc. used so many Jaz drives and Jaz disks in the creation and editing of their film..." "People who are creating the above media need and use a Jaz drive. (Refers to 7 items above and the film makers). Jim Kelly, Vice President & General Manager, Tape Business Products (Clik!) He is a very smart, very personable, very confident and excited about Clik!s' prospects and future. He and others believe it will be a multi-billion dollar business. He stated: "Our extensive market surveys show that we have hit the SWEET SPOT of such media with the Clik! at $9.95 the price of a roll of developed film with the cost of the drive under $200." He then conducted a very well prepared and quite interesting slide show (too fast for me to write down the highlights). In it he showed the following potential partners: Vadem, Infocus, Texas Instruments, MCI, Microsoft, Compaq & NEC. "The MCI agreement was signed TODAY." "NEC letter of intent also received." "...have produced over 900 Clik! drives for evaluation..." "Shipped 100s of evaluation drives." He then showed a short but extremely interesting video with various CEOs or high Executives of the following companies stating their interest and some of the features they liked in the Clik!: CNF Kodak Zoran Texas Instruments - "For Wireless and IC storage which complements our own..." In Focus - Projector Digital - ( Looked like a great quote but went to fast to write it down) He then talked about a docking station for the Clik! and that OEM drive is the size of a credit card for use in cameras, HPcs (?), PDAs, projectors, printers, cell phones, handheld games.... (A techie told me that there would a frame inside a PC to accept the Clik! drive ( the card sized one). His presentation was excellent but could have been longer with more details. (It would have helped if I could have written faster also.) My guess is that a lot is happening very quickly and we should see much occuring in this area because of all of the evaluation models that have been shipped. I think he opted to withhold this info until there were signed agreements in hand. Smart man! I am very impressed with his honesty, drive anddetermination, preparation, competence and most of all for his obvious achievements for IOM. For such a young man maybe 30 or so, he really has a bright future ahead of him. He is definitely a leader and a doer! L.Scott Flaig, Executive Vice President, Operations He impressed me as a very smart, very confident, extremely focused on his tasks at hand with obvious broad experience in operations. The minute he talks or answers a question reams of data and applicable knowledge stream out of his mouth. He is a very accomplished person in his field with an extremely quick mind. I see why he was chosen as COO and Executive V.P. "There must be a leveraging of assets, systems, personnel, supplies, products, finance, etc...." "The Business Product has six facets (or areas of concern): Planning Logistics Leveraging of supplier contracts Product Marketing Product Quality Product Cost" "...in Cost Mangement you must be concerned with P& L performance and predictability..." " Our 200 suppliers will go down to about 50 suppliers with whom we will have an INTIMATE RELATIONSHiP!" "...the 6 Sigma system = defect free products + defect free processing!" "IOM is ISO certified in the distribution and plant and now are looking to get the same certification in R & D." ( I really don't know enough about the importance of this, so hopefully those knowledgeable in this area might post the significance of same). "Under the supply team management concept we will follow is BUILT TO ORDER with under 3 months flexibility. (Different than the system we have followed in the past.)" "IOM is presently at 4 turns of inventory now but we will have double digit inventory turns in the future." (I remember that someone (I think Jery Garner former Controller of IOM) and/or MF Roberts stated that break even was at 4 turns of inventory). "We must focus on the customer! We have done so in one instance by a joint Survey conduted by IOM jointly with Arthur Andersen Co. and the National Business School at the University of Michigan. The report will be published in Fortune Magazine. .. Results: 71 for IOM 75 HWP - Customer Satisfaction (IOM in second place) 82 for IOM 82 HWP - Customer perceived value (Tied for First Place) 60 for IOM ? ? - Customer loyalty (First Place) (No one near to IOM)" "We will meet quarterly with all OEMs and extending over the next two months with retailers" "We will also have a customer Satisfaction Index and a customer quarterly review." "Customer will be electronically in virtual co-location and in design by customer." (Ann Squires had this note. I think it means they will be able to survey the customer electronically probably via web page or internet for survey on design,price,etc.of old products and new products) To say that this fellow is organized is the understatement of the year. He impressed me very much with the quaility of the program his "vision", his confidence, and his probable attainment of his goals. Another leader and doer, IMO. Jim Sierk again: "We will continue to have stunning growth!" "We will be a friendly and responsive to our customers." (See Buried Lie's posts on this subject). " The customer's world can be changed by what we do!" End of Part 3. Part 4 will follow in a few hours with the Q.& A., Chairman Dunn's admission, Fools present at SLC, and Suggestions for preparation and attendance at future meetings. 2+++++++++++++++++++++++++++
Subject: Re: OEM % of BUSINESS Increasing First off Mark, I think you have to look at the overall PC market when evaluating products that are sold to be included in the PC market. Zips sales are increasing but, (here I will agree with everyone else who is bearish) it may not be increasing at fast enough rates. Prices for removable storage devices are falling. If Iomega and the rest 0of this industry follow a typical Disk Drive war pattern, even the most bearish on this board may be too conservative in their estimates of how cheap the Zips will be selling for. IDG says PC unit shipments will be 93 million this year. I agree that probably 70-80 will be sold in the US. Iomega is not very thoroughly penetrating this market ...yet. I think that production will have to skyrocket for this to happen. I also don't believe Iomega has the cash or credit to do the expansion this year. Every so often a takeover rumor starts. Kim Edwards was admantly opposed to a takeover. I think that next time there may be some support and for very good reasons. 3+++++++++++++++++++++++++++
Subject: Re: A few thoughts I'm not sure anyone can say exactly how unit sales will look, in terms of any given quarter's sales number, if Zip is on its way to being sold in the majority of PCs as a replacement for the obsolete floppy drive. I have a question for the bears who insist that Zip is not fitting some pattern: Give us one product in the PC today that followed a pure geometric unit sales and attach rate progression on its way to being a standard? Or give us one product that has followed any kind of linear progression? The CD-ROM and Modem are the latest products to become a standard feature in most PCs. Neither one had any kind of predictable progression in unit sales growth on the way. In the CD-ROM's case it was a add-on retail product for a long time with very little attach rate for a long time. Then it was an option for awhile, then standard in Micron and Dell PCs but still not much attach rate. There was no steadily rising unit sales either. Then one day, boom, in about 6 months it went from 10-20% attach rate to 75% and that is all she wrote. Modems had a similar story but over a time period twice as long. Can IOM do well without Zip becoming the standard? Sure. If IOM continues to grow revenues 15-25% per year, and establishes a 5-6% net income margin, the stock growth will eventually match that earnings growth. I think there is plenty of market between here and a standard to have such growth. There are certainly other options: 1. IOM is standard in Mac computers and in many PCs (close to this now) 2. IOM is standard in most home PCs but only found in some corporate PCs Certainly either of the above would be accomplished at a higher stock price than $8. Clik! is a wildcard and Zip's installed base might allow for leveraged sales of next generation Zip drives (in other words: selling 200-300MB Zip drive to Zip 100 owners). 4+++++++++++++++++++++++++++
Subject: ZipPlus COP? ZipPlus Cost Of Production (COP)? HMAletter stated in the post "Re: ZipPlus a minus?": << ... Assuming that the cost is not higher than the PP or SCSI, I think the Plus should be the only external offered. Superior technology and design, the Plus could well be more profitable at lower prices when Iomega produces only one external Zip device. That would provide for economies of scale, and perhaps, reduce the production problems.... >> Well said. Now please correct me if I am wrong. I am under the impression that the simplest Zip drive may be natively SCSI. Electronics are probably added to a simpler SCSI drive internally to turn it into PP or ATAPI. So a PP Zip may cost marginally more to produce than an External SCSI Zip and likewise the ZipPlus may cost marginally more to produce than a PP Zip but not a whole lot more (since the needed PP electronics and most of the SCSI electronics were probably there inside the PP Zip drive already and ZipPlus may mainly or only need to add the Automatic Switching function to tap either the SCSI or PP both probably available internally INSIDE the PP Zip drive). I am not talking or worrying about the other stuff like software/smaller & better power suppy ...etc that are included with the ZipPlus package. Those could always give and take. If a PP Zip can be priced the same as the External SCSI Zip while having a marginally higher Cost Of Production (COP), so may ZipPlus someday. I could see External SCSI Zip being phased out first and Iomega may have only two External Zip drives: PP Zip for lower price, ZipPlus at a slightly higher price as an upgradable PC Zip drive and also replacing the External SCSI (sorry Mac friends, but you people always seem to be able to afford better stuff at a slightly higher price :-) --- you may love the cross Mac/PC platform ZipPlus anyway). It could be ZipPlus coming down in price or through rebate to the current price level of PP and External SCSI Zip drives, or close to it, and then PP Zip price may drop slightly further while ZipPlus may be phasing out External SCSI Zip and ZipPlus price may be remaining at or close to the current price level of External classic Zip drives. Like HMAletter clearly pointed out that if the focus is shifted to concentrate more on producing ZipPlus drive (first rolling External SCSI Zip into ZipPlus), due to economies of scale, streamlined production, circuit integrations and reduction of parts supplies and inventories, ZipPlus Cost Of Production (COP) may come down. I would hope ZipPlus COP would someday come down below the present day PP Zip COP which would enable the consolidation into only one External drive. Consolidation into one External drive should enable greater economy of scale and further reduce Zip drive COP. But the whole thing could be done in one stroke. Phase out External SCSI and PP Zip both at the same time in favor of ZipPlus. The issue may just be a matter of faith. Does Iomega want to lower ZipPlus COP a little bit more first before making any moves to lower ZipPlus price or to phase out classic Zip drive(s), or Iomega can move first and trust that the ZipPlus COP will come down after the lowering of ZipPlus price and/or consolidation into fewer drives? The ZipPlus COP may come down after the lowering of ZipPlus price and consolidation into fewer drives, due to the expected subsequent increased ZipPlus sales uint volume and enhanced economy of scale in production. Does Iomega have enough faith in that, and can they actually do that? *Side note: An external SCSI Zip drive can be turned into a drive working on PP by adding an external "SCSI to PP" converter. $50? Not sure about the price of the converter or availability. (I know about the Jaz Traveler) Somehow that seems to be why ZipPlus should not be more than $50 more expensive than the external SCSI Zip, not counting the "other improvements" on ZipPlus. But on the other hand, a PP Zip (needless to say: an external drive) can't be turned into one EXTERNALLY working on SCSI -- the existing Parallel Port there on the drive would be the bottle neck choking and slowing down the thing anyway even if there is such an external adaptor. It wouldn't make sense anyway because you might as well use the PP. INSIDE the PP Zip drive (and "before" the Parallet Port) it may be a different story as stated above earlier in the post. 5+++++++++++++++++++++++++++
Subject: Re: Sony's new floppy I saw one today at Comdex. It was in Teacs booth. The rep said it was a working model and that they had a demo that runs video directly from the disk. The computer however was "having problems" so they didn't even try running the demo. The rep said Teac will manufacture the drive using Sonys technology. Available third quarter, no price yet. Specs from the literature; Access Time: 20ms Tranfere Rate: 3.6mb/sec. Rotation Speed: 3,600rpm (200mb), 300rpm (1.44mb) Head type: Dual Discrete Gap, Narrow for 200mb, Wide for 1.44mb .."the Teac HiFD is desighned with a flying recording head that optimizes its life expectancy. Becuase the head and media do not come in contact, erosion and wear to either component is reduced significantly." "Over 120 Million Teac Floppies Sold" (1.44 of course) _______________________________
End Report. Posts covered through 9:00pm ET 4/23/98
WE
DELIVER - Get IOM
In Fooldom Today delivered
|
||||||||||
|
|||||||||||
