Daniel,
I continue to be amazed at your inability to understand the context in which the Maxtor deal was done. Even more startling are the statements you make about Maxtor that indicate a rather naive and really academic understanding of the disk drive business.
First, you say "...There is NO contract to sell keepered media or receive royalties from its manufacture." There IS a contract that specificies "... pricing, duration and the minimum purchase quantities that would be required for the purchaser to maintain favorable pricing terms...." There is also a contingency clause in the contract that provides an easy way out for Maxtor if it presumably is unable to get satisfactory yields in the semi-automated disk drive assembly process.
You also say, "...And what are their responsibilities in order to get this discount? Absolutely Nothing! Maxtor has not committed themselves to producing a single keepered drive." This is where your
sloppy logic really fails you. If you have followed the progress of KM that Ampex detailed in its SEC filings, you would be fully aware that earlier this year Maxtor was one of the 3 drive makers to sign a Non-disclosure Agreement in order to evaluate KM. You would also be aware that Maxtor is probably the drive maker that, during the negotiations detailed in the 11/27/96 filing, indicated the following:
"...one such manufacturer has advised Ampex that it is evaluating the
initial criteria for a program that would include keepered media. This program currently contemplates finalization of engineering design in the first quarter of 1997. If, at that point, the manufacturer decides to put the program into production, volume manufacturing would be expected to commence later in the year..."
By the way, take note of the positions of the other 2 drive makers that Ampex approached (at least 2 others approached Ampex):
"...Each of the manufacturers to which Ampex has provided draft agreements has advised the Company, in general terms, that it would be possible for it to launch a hard disk drive product incorporating keepered media into volume production in 1997...."
So when you say that Maxtor has no obligation to develop a keepered drive you may be technically correct, but simply flat-out WRONG in practical terms because Maxtor is fully aware of the interest in KM by the bigger drive makers with bigger factories and bigger R&D labs.
That level of interest is precisely why you sound ludicrous when you say, "... Under this latter strategy, they could have no current plans for production unless their competitors start making keepered deals with Ampex. If and when this occurs they could then step in and undercut them with their sweetheart deal...." Have you run a business before, man? Even a lemonade stand? Given the fact that a disk drive cycle takes anywhere from 6-12 months, how can you maintain with a straight face that a wait-and-see strategy is even viable at this point? If, like Maxtor, you have spent time and money working on a technology that could potentially increase the capacity of the platters at nominal cost, wouldn't you want to be the first to market with that?
Look, I appreciate the effort to provide a reasoned counterbalance to the over-enthusiasm that you see. But it seems to me that if you are going to hold yourself up as the voice of reason, you have an obligation to say something substantial. Frankly, I don't see any in your posts.
And give the people on this board some credit! The people you call wild-eyed optimists have also participated in discussions about the landmines in Ampex's balance sheet or the threat and opportunity that MR recording poses for Ampex. I don't recall that you contributed anything to those discussions.
Gus
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