From ECDL.web

The ZIP drive is a medium-capacity removable disk storage system that was introduced by Iomega in late 1994. Originally, Zip disks launched with capacities of 100 MB, but later versions increased this to first 250 MB and then 750 MB.

The format became the most popular of the super-floppy type products which filled a niche in the late 1990s portable storage market. However it was never popular enough to replace the 3.5-inch floppy disk nor could ever match the storage size available on rewritable CDs and later rewritable DVDs. USB flash drives ultimately proved to be the better rewritable storage medium among the general public due to common availability of USB ports built into most personal computers.

Zip drives initially sold well after their introduction in 1994, owing to their low price and high (for the time) capacity. The drive was initially sold for just under $200 USD with one cartridge included, and additional 100 MB cartridges for $20. At this time hard disks typically had a capacity of 500 MB and cost around $200 USD, and so backing up with Zip disks was very economical for home users — some computer suppliers such as Dell and Apple Inc. included Iomega internal Zip drives with their machines. The growth of hard drives to multi-gigabyte capacity made backing up with Zip disks less economical. Furthermore, the advent of inexpensive recordable CD and DVD drives for computers, as well as USB flash drives, pushed the Zip drive out of the mainstream market. However, the advantages of magnetic media over optical media and flash memory, in terms of long-term file storage stability and high erase/rewrite cycles, still affords them a niche in the data storage arena. In such applications, Zip competes primarily with USB external hard drives and the Hi-MD version of Sony's MiniDisc, which stores up to 1 GB on a disk that is smaller and less expensive than a 100 MB Zip disk.