Iomega Corp is on the verge of adding NEC Corp as a third source of its in-demand 100 megabyte Zip drive, on top of its deal with Matsushita Electric Industrial Co Ltd announced last September. In an announcement high on self-congratulations but low on detail, Iomega Corp of Roy, Utah confessed that the premature Letter of Intent has been announced merely to allow NEC the chance to begin marketing activites on what for them is a new storage technology. But just when a contract would be signed, or manufacture would start were questions left unanswered by spokesmen. NEC will apparently have rights to manufacture the drives, (which some believe will render the ancient 1.4 megabyte floppy obsolete) include them in its own machines and sell them OEM in competition with Iomega. Matshushita signed a similar deal last year but has yet to begin manufacture. NEC currently makes almost 10 million floppy drives a year at the moment, but it is anyone’s guess how many the Iomega technology will replace. Iomega has had considerable success with the Zip drive, a two year old business area which diverged from its traditional Bernoulli storage technology and has now shipped some 5 million Zip drives, something like 2 million during the past six months alone, lining up OEM business with such notables as Apple, Dell, IBM, Hewlett-Packard and even arch rival Compaq. Compaq is engaged in a consortium backing an alternative 120 megabyte standard in conjunction with Mitsubishi, but with revenues for the year reported last month, up some 270% on the back of the Zip drive, Iomega seems to have captured the market. Iomega celebrated the NEC deal by announcing that its recommended price for the Zip drive at retail was dropping $50 to $149.
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