Iomega Targets Explosive Growth of Personal Digital Audio Player Market.

Business Editors/High-Tech Writers

ROY, Utah--(BUSINESS WIRE)--July 12, 2000

Iomega's Clik!(TM) Portable Storage Platform

Signals Competitive Advantage

in Anticipated $500 Million-plus Market

Iomega Corporation (NYSE:IOM), a global leader in data management solutions, announced today that it is uniquely positioned to take advantage of the explosive growth expected in the personal digital audio player market over the next few years.

With an Iomega-branded digital audio player in retail stores this fall and several additional manufacturers producing MP3 players with Iomega's built-in Clik!(TM) drive, Iomega expects to be a dominant force in the digital audio player market.

Sales of personal digital audio players are expected to increase dramatically over the next few years. Cahners In-Stat Group, a technology marketing research firm, estimates that unit shipments will increase from 2.8 million this year to more than 10.7 million in 2004. The most dynamic unit growth will occur in 2001 when more than 6.3 million units are expected to ship, according to Cahners. Total annual revenue for portable digital music devices is anticipated to be approximately $378 million in 2000 and $599 million in 2001, according to Cahners.

Iomega will begin shipping its first digital audio player in the fourth quarter of this year. The Company also expects manufacturers incorporating Clik!(TM) drives built into their portable digital audio players to begin shipping those products during the remainder of 2000, with the first one expected to be available to consumers later this month. Iomega believes that the combined shipping of these different digital audio players will result in more than 900,000 Clik!-enabled digital audio players in the marketplace in 2001.

"Iomega's digital audio player and other players that incorporate Clik! drives will immediately become consumer favorites in this expanding market," said Bruce Albertson, president and CEO, Iomega Corporation. "Clik! drives and disks reduce the cost of storing music on digital audio players by about 90 percent compared to the cost of storing music on today's digital audio players. With its inexpensive, unlimited storage potential, Clik! drives and disks provide the portable solution that digital music enthusiasts have been waiting for."

The Clik!(TM) Disk Advantage: $10 Versus $100

Iomega's digital audio player and other MP3 players with Clik!(TM) built-in will give consumers the ability to create CD quality music at about $10 (U.S.) for each Clik! 40MB disk (when purchased in a 10-pack), versus approximately $100 to create music on each 32MB solid state memory card, which is the industry's only removable storage alternative today.

"Clik! disks could become the digital record albums of the future," said Noel Sobelman, senior manager digital audio products, Iomega Corporation. "Imagine spending 75 cents to store a three-minute song on a 40MB Clik! disk versus more than $9 to store that same song on a solid state memory card. And once that 32MB solid state card is filled with about a half-hour of music, the consumer is stuck with those musical selections, or they can erase the music and start over. The only other option is to buy another $100 solid state card. With the Clik! drive, you pop in another $10 disk and off you go with another album of music. That's a big difference in convenience and cost, and consumers will recognize that value immediately."

A national survey by Iomega showed that future owners of digital audio players with built-in Clik!(TM) drives will, on average, purchase more than 10 Clik! disks per year. The affordable Clik! disks will allow consumers to create inexpensive digital music collections. "Portable digital audio players with built-in Clik! drives will give consumers the advantage of saving the music they want at a price they want," said Sobelman.

The First Clik!(TM)-Enabled Digital Audio Player

The first portable digital audio player with a built-in Clik!(TM) drive is the Sensory Science RaveMP 2300, expected to arrive at retail stores later this month. Several additional digital audio players with Clik! drives built-in are expected to begin shipping both domestically and internationally later this year from manufacturers including LG International Corp., Rexon Technologies, Addonics, Varo Vision, RFC and Frontier Labs. Iomega is also working aggressively with other manufacturers to bring additional Clik!-enabled portable digital audio players to market.

Iomega's own portable digital audio player will feature the Dadio(TM) operating system by Interactive Objects Inc. (OTC BB:OBJX), a recognized leader in digital audio software. The Dadio operating system enables the Iomega player to store and interchangeably play back music encoded in various formats. The Dadio operating system also supports both free and secure copyright-protected music, giving consumers the broadest selection of downloadable music in the industry.

Iomega's digital audio player will also offer the "next generation" features most often requested by digital audio enthusiasts, including a programmable equalizer, drag and drop file transfer capability, fast USB connectivity and an easy-to-use menu display. Iomega's digital audio player also has been designed to meet the portability and reliability requirements of the active, on-the-go user.

"Our digital audio player will be a hit because the affordability of Clik! technology allows consumers to create virtually unlimited digital music collections on small, inexpensive $10 disks," Sobelman said. "At the same time, the Iomega digital audio player will be skip-free, have a long battery life and sport the same sort of cool design that people have come to expect in Iomega products."

About Iomega

Iomega Corporation (NYSE:IOM) manufactures and markets the award-winning Zip(R), Jaz(R) and Clik!(TM) drives and disks and markets the ZipCD(TM) CD-RW drives and discs. Iomega's products help people to save, share, manage and create important information such as spreadsheets, slides, Internet downloads, audio files and personal photographs, while protecting that content from viruses and hackers. Used in homes, businesses, government and educational facilities and by creative professionals everywhere, Iomega storage solutions are the enabling technologies preferred by millions. The Company can be reached at 1-800-MY-STUFF (800-697-8833), or on the Web at http://www.iomega.com.

Special Note: Statements contained in this release relating to the expected availability and functionality of Iomega's branded digital audio player and other manufacturers' digital audio players are forward-looking statements. There are a number of important factors that could cause actual events to differ materially from those indicated by such forward-looking statements, including market acceptance of, and demand for, Iomega's branded digital audio player product and other manufacturers' digital audio player products, manufacturing issues, including component availability and pricing encountered by Iomega and other manufacturers, development and distribution issues of these products, product pricing and conformity to specifications, competition, intellectual property rights and other risks as identified in Iomega's Annual Report to Stockholders for 1999 on Form 10-K, and its most recent quarterly reports filed with the SEC.

Copyright(c)2000 Iomega Corporation. Iomega, Zip, Jaz, Clik! and ZipCD are either registered trademarks or trademarks of Iomega Corporation in the United States and/or other countries. Certain other product names, brand names and company names may be trademarks or designations of their respective owners.