Dueling Fools
Iomegadeth?
The Bull Rebuttal
By
It's Déjà vu all over again. That's my buddy Paul for you. The guy who put the bear in Berra. Then again, he's referring to how right he was almost two years ago. I'm referring to how right he was more than four years ago.
It's "Rick and Paul's Excellent Adventure" and we've been transported to two different time periods. Then again, Paul seems to still be stuck in the past. Trailing losses. Trailing sales shortfalls. Trailing trails. He even brings up an interesting nugget -- Iomega's $2.9 million in retained earnings.
Take a look to the right folks. Next year, even the most bearish of analysts expects the company to earn at least $80 million. It's true that Iomega has been a lackluster performer during transitory times, but this is apparently not going to be one of them. Retained earnings are about to shoot up almost 30-fold.
Paul closes by taking a look at the four primary product lines for Iomega. Let's follow.
Zip? 30 million drives. 180 million disks. If that isn't ubiquitous then I want to know what is? He considers the Zip's 1995 debut ancient but ignores the evolution that has brought about bigger (250 megs) and better (USB) versions since that time. My worthy Fool also brings up the iMac as proof that we don't need removable storage. Let me refer you to Apple's iMac page. There, in explaining the dual-channel USB, it notes how that "lets you add over 100 devices, from joysticks to Zip drives, with no reconfiguring or restarting."
Not once does the page ever mention plugging in an external floppy. Even Apple realized that the Zip was more standard than the floppy. The Zip is everywhere.
The Jaz was always a niche product for professionals who needed large amounts of removable storage. The majority of us are content in lugging the megs of multimedia downloads or company presentations or Kinko's-bound publishings on Zip. Iomega is moving its resources to more dynamic product lines and that is not a negative.
ZipCD? Well, that's not a dynamic product line. Yet. This is where Albertson will be able to prove himself the way he did for GE. I like his chances. If a company like Dell <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: DELL)") else Response.Write("(Nasdaq: DELL)") end if %> or Compaq <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPQ)") else Response.Write("(NYSE: CPQ)") end if %> can create a brand mystique that rises above the spec sheet, why not CD drives? Why not Iomega?
The Clik! is the wild card here. It is the compact memory solution that is paving new paths for Iomega. Last week the company lined up several MP3 players to add Clik! drives. The tiny Clik! disks can hold 40 minutes of customized MP3 music. This appeals to another sense beyond scent -- and the eau de apathy never sounded this good. Splash it on. Turn it up. Iomega is back.
Next: The Bear Responds