It has been confirmed that the WDC 18.3 gig enterprise drive is a RDRT
headed product. The release from WDC is as follows:
biz.yahoo.com
I wish the Company would release that. But it was confirmed in a
conversation with a Company representative this morning.
QNTM's DLT heads (tape drive heads) are not produced by RDRT, so if
RDRT is successful with SDLT, which looks promising, that business
will be incremental to their current business. Possibly adding 5 to
10% to total Company's sales starting in the late summer. Clearly QNTM's
move to set-up a separate tracking stock indicates QNTM's expectations
for growth in this area are great. Which should in-turn benefit RDRT.
SDLT is a MR head with multi-channels, so the technology is not GMR,
and maybe easier for RDRT to execute. The multi-channeling if
significant. Could someone more technological oriented explain how
that multi-channeling will cause this product to be harder for competition
to produce, and possibly be patentable.
The importance of success with QNTM, both in hard drives and with tape
heads, is easily noticed with the following table from the December
1998 filed Form 10-K:
NET SALES
The following tables set forth certain sales information for the
Company's largest customers and HGA/HSA product mix as a percentage of
net sales, for the three fiscal years ended September 30, 1998:
1998 1997 1996
---- ---- ----
Customers
Western Digital....................................... 49% 51% 43%
Maxtor................................................ 25% 13% 12%
Samsung............................................... 15% 5% --
Quantum............................................... 3% 18% 29%
All Others............................................ 8% 13% 16%
--- --- ---
100% 100% 100%
--- --- ---
HGA/HSA Product Mix
HGA................................................... 11% 31% 41%
HSA................................................... 86% 67% 57%
Tape and Other........................................ 3% 2% 2%
--- --- ---
100% 100% 100%
--- --- ---
So a return of hard drive units to QNTM could be substantial, as
well as addition of the SDLT tape.
Dallas Meyer has been at work for a week and has ideas on improving
the Nano to Pico conversion, but it is too early to tell how well and
quickly they will work towards improving the move to Pico. The plus
here is progress is being made, and RDRT's management is on the
problem to move forward.
Wednesday next week Alan Lowe will be speaking at the Morgan Stanley
conference, and then the Company will go into their quiet period for
the quarter. Their next financial conference will be at the end of
April.
Still long and holding,
(-8 Dennis 8-)
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