I/OMagic Corp. - Computer Peripherals -  Category Directory

(949) 707-4800

4 Marconi

Irvine, CA 92618
www.iomagic.com

Sales

$62 million

Business Description   
We operate in the data storage and digital entertainment industries. We sell data storage and digital entertainment products primarily in the United States and to a lesser extent in Canada, together known as the North American marketplace. Our data storage product offerings are predominantly focused on optical data storage media and include recordable compact disc, or CD, drives and recordable digital video or versatile disc, or DVD, drives predominantly for personal computers, or PCs. Our digital entertainment product offerings are predominantly focused on products that complement our line of data storage products and include MP3 players, digital audio headphones and palm-sized 20 gigabyte hard disk drives that we call our Digital Photo Library™ system. Our data storage products accounted for approximately 94% of our net sales during the year ended December 31, 2003, whereas our digital entertainment products accounted for approximately 6% of our net sales for that period.

We sell our products through computer, consumer electronics and office supply superstores and other major North American retailers, including Best Buy Co., Inc., Best Buy Canada Ltd., CompUSA, Circuit City Stores, Inc., Fred Meyer Stores, Microcenter the Ultimate Computer Store, Office Depot, Inc., OfficeMax, Inc., RadioShack Corporation, Staples, the Office Superstore, Inc., and Target Corporation. Our retailers collectively operate retail locations throughout North America. We also have relationships with other retailers, catalog companies and Internet retailers such as Buy.com, PC Mall, Inc., Tiger Direct, Inc. and Dell Inc.

We market our products under three brand names. Our three brand names are I/OMagic®, Digital Research Technologies® and Hi-Val®. We sell our data storage products under each of these brand names, bundling various hardware devices with different software applications to meet different consumer needs. Our digital entertainment products are currently sold under our I/OMagic® and Digital Research Technologies® brand names.

We employ a “good, better, best” marketing strategy, offering a range of products within some of our product categories. We believe that this strategy enables us to address different segments of the market for data storage and digital entertainment products by offering varying products with different levels of performance and functionality at multiple price points designed to satisfy the diverse needs and budgets of consumers.

We subcontract manufacture our products predominantly in Asian countries, which allows us to offer products at highly competitive prices and which we believe permits maximum flexibility in the development of new and enhanced products. Many of our subcontract manufacturers have substantial product development resources and facilities in Asia, and are among the major component manufacturers in their product categories. Some of our largest subcontract manufacturers are also our shareholders, including Behavior Tech Computer Corp., and its affiliated companies, or BTC, and Lung Hwa Electronics Co., Ltd. According to industry sources, BTC is among the largest optical storage drive manufacturers in the world and Lung Hwa Electronics is a major manufacturer of digital entertainment products. These subcontract manufacturers expend substantial resources on research, development and design of new technologies and efficient manufacturing processes.

Our data storage products currently include:

• Internal and external optical data storage drives based on the following technologies: CD-ROM, CD-RW, DVD-ROM, DVD+R, DVD+RW, DVD+/-RW+/-R or CD-RW+DVD;

• External CD-RW and DVD+RW drives that integrate a recordable drive and a built-in seven-in-one, or 7-n-1, digital media card reader with a proprietary external casing that features a three-way adjustable lighting system allowing the user to adjust the lighting to blue, red or purple, which we call our MediaStation™ devices; our 7-n-1 digital media card reader supports seven different types of solid state memory devices including: CompactFlash, IBM Micro Drive, Multimedia Card, Secure Digital, Memory Stick, Memory Stick Pro and SmartMedia;

• Internal dual format DVD recordable drives that integrate a recordable drive and a built-in 7-n-1 digital media card reader;

• Disc duplicator systems that are stand-alone units that do not require a computer connection and that copy information from a source disc, such as a CD or DVD, to a compatible target disc;

• External Floppy disk drives that integrate a floppy disk drive and a built-in 7-n-1, digital media card reader with a proprietary external casing that features a three-way adjustable lighting system allowing the user to adjust the lighting to blue, red or purple, which we call our DataStation™ devices; and

• Case enclosures for external or portable data storage drives.
 

Ticker

IOMG

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InFocus

I/OMagic

Key Tronic

Logitech