Iomega hives off SyQuest inventory

Iomega today signed US-based Peripheral Computer Support (PCS) to handle what remains of SyQuest's customer base and product inventory on the storage specialist's behalf. Iomega bought SyQuest, its former arch-rival, at the beginning of the year after an 18-month attempt by SyQuest to become a viable business once more. SyQuest's troubles followed years of resting on its laurels while Iomega ate into its marketshare with innovative products like the Zip drive. Ironically, Iomega has been having problems of its own, largely for similar reasons. The PCS deal allows the company to sell Iomega's stock of SyQuest products and to manufacture media to sell to existing customers. But as PCS doesn't have the right to build new drives, the opportunities to find new SyQuest buyers seems decidedly limited -- doubly so since even Iomega is finding it hard selling its own drives. PCS already provides customer warranty support for SyQuest products on Iomega's behalf. Iomega bought SyQuest for its intellectual property, but ended up with all its inventory and fixed assets too. The company is currently attempting to sell off the latter, and the PCS deal neatly allows it to ditch the inventory side of the acquisition. ® See also Iomega predicts huge Q2 loss