History 2003: Can Forthcoming Digital Capture Technology and Removable Rigid Disk Save Iomega?

Can Forthcoming Digital Capture Technology (DCT) and Removable Rigid Disk (RRD) save Iomega?

Iomega 1.5GB DCT cartridge

Iomega REV

“Yes,” was the immediate response from German-born Werner Heid, 44, president and CEO of Iomega.

It remains to be proven, however.

His company has long been seeking a new miracle product to succeed its Zip and Jaz drives, which no longer enjoy the success of their glory days.

And it’s tried everything: venturing into consumer electronics with MP3 players and various software, constructing with IBM a removable HDD (Peerless), reselling various and sundry products under its own brand name (flash cards and keys, external floppy and HDD drives, erasable CD and DVD drives), increasing the capacity of Zip to 750MB, entering into the data recovery service, then Web-based backup, taking a stab at NAS, outsourcing all its manufacturing. So far, nothing has taken.

Iomega has shrunk from 3,500 to 600 employees, and annual sales, which were $1.7 billion in 1997, will have a hard time hitting $600 million this year.

The company even expanded its hunt to acquisitions, but has come up empty handed, deciding to distribute a portion of the cash it had earmarked for such a transaction to its shareholders.

Thus it has turned once again to its own R&D division, but the 2 novelties, DCT and the RRD, won’t be around until the first half of next year, and will have difficulties revolutionizing the storage industry.

For the 2003 alone, ended in June, the Zip company spent $6.1 million on the development of the 2 new removable magnetic disk devices.

“Total program until the launch of the new products, in 1Q04 and 2Q04, costs $40 million“, said Heid.

The latter figure includes all operations, from basic R&D to manufacturing tools.

This article is an abstract of news published on issue 189 on October 2003 from the former paper version of Computer Data Storage Newsletter.