Re: Oh, HELL -- SyQuest Declares Chapter 11!

[mjmahon@aol.com (MJMahon)]

martin.w6@ukonline.co.uk (Martin Wilson) wrote:

>I wonder what the problem was, the marketing never seemed
>that bad and the products are excellent. 

Their products were fine.  They followed Iomega's lead in the "give
away the razor and make you profit on the blades" strategy.  The
difference was that Zip disks are very inexpensive to make (basically
just stiff floppies), while Syquest cartridges were hard disk platters,
and therefore more than twice as costly to manufacture.

The result was that Iomega's margins were several times Syquest's
at the same price points (for the disks/cartridges).  That buys a lot
of marketing and R&D.  Note that Iomega is now promoting getting
more "stuff", like music, off the web and onto their disks.  Smart.

Actually, this was all too clear a couple of years ago--it just took
this long to play out.  I tried to explain back then why Iomega
was the long-lived and bound-to-get-pervasive choice, but the
spirit of Beta is strong, and will not listen to reason.  ;-)

>At least there should be some great offers on Syquests
>drives now as they clear stocks. Eventually though I suppose
>Iomega will ramp up there prices.

Probably not, or not by much.  Remember, the money is made
on the disks, not the drives, and there are enough licensees that
disk prices will not go up much.  The profits are obscene on them
already!  ($10 for a $2 item???!)  The price on the drives won't
go up because they're what you buy disks for, and there are a
few high-capacity drive competitors out there who Iomega must
fend off.

-michael

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