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Iomega launches OEM'd CD-RW drive

Step back for storage company, but step forward for its finances

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Iomega, the financially troubled storage specialist, today took a step -- several steps, actually -- backwards into its past to announce shipment of a product not based on one of its own technologies. Marking Iomega's return to OEM-hood -- it started out offering systems based on SyQuest technology -- was the launch of the $209 ZipCD, the company's first rewritable CD drive. What we have here is a standard CD-RW mechanism cunningly branded to match Iomega's line of own-developed products. Still, it's not as retrograde a move it sounds. Iomega reckons some 12 million CD-RW drives will ship this year, and, as a storage company with a well-known brandname, it makes sense for the company to move into this market. And since Iomega is having a job selling many of its other products, most notably its Jaz removable hard drive solution, breaking into a popular area of the storage market, is a smart move. Oddly, the ZipCD is an internal-only product, suggesting Iomega doesn't want it to distract attention too much from its own products. It also suggests this is largely a money-grabbing exercise -- why else not offer the ZipCD in one of the company's slickly-designed enclosures? Given the state of Iomega's finances -- last quarter it lost $61.7 million on shrinking revenues of $349 million -- it needs to make money, and make it quickly. Churning out standard CD-RW units in Iomega wrapping isn't a bad way of doing that. ®

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