Storage company Iomega has reduced its offerings to three in an effort to re-focus on its core competencies.
The move comes after a difficult 2001, characterised by price wars and tighter margins.
The company will build upon its profitable core Zip product line and expand its position in external CD-RW solutions in order to reverse the revenue decline experienced in 2001.
Revenue for the full year 2001 of $834.3 million decreased by $465.9 million when compared to revenue of $1.3 billion achieved in 2000.
Patrick Niel, Iomega European sales director for the South region, including SA, says the company suffered a similar situation to other storage companies, and last year was characterised by increased competition and heated price wars.
Although Iomega relies heavily on the retail channel in Europe, Niel says the local retail market has not reached maturity and although further investigation into local retail stores will be undertaken, the company will adhere to its primary distribution channel of which only 40% goes through retail stores such as Incredible Connection.
The Zip drive still accounts for more than 70% of the business, says Niel. He notes that although the CD-RW Iomega family is gaining popularity worldwide, the original Zip format storage devices still lead the reduced Iomega stable.
The company, which once boasted a range of devices such as the Zip and Jaz drives, as well as the HipZip MP3 player, has reduced its product range down to just three devices. The three are the Zip drive, the Peerless removable hard drive and the CD-RW product.
Niel says that while Iomega has traditionally been strong in the retail market, the company will devote a lot more attention to the SME market in the coming months. "We will be taking the SME market much more seriously," promises Niel, who says the company will release a number of new products relevant to this area in the next few months.
Although unwillingly to pre-empt the announcements, he says the company will most likely be more involved in the high-capacity storage market. "We are going to compete with those guys more and more," he says of the hard drive manufacturers.
Niel adds that it is likely there will be a DVD technology in Iomega`s future but "it is not going to be our core business".
The Iomega range will now be available to the local market exclusively through distributor Datashuttle, which has been dealing with Iomega for eight years.
Share
