Hello Mr. Oliver:
Maxtor did not strike me as a big deal or I missed the point. The potential co-development work on microactuation was indicated to be at least a year in process. It was my impression from the CC we would probably hear the developments noted in the future, but no announcements of import until they are trialing prototypes in drive programs or HTCH is in the position to see commercialization. The two development efforts were indicated in a 12-18 month out timeframe. I doubt that was a conservative time frame. I would expect to hear talk of working prototypes now and learning how they perform for both drive assembly and drive performance, if HTI is expecting to sell such a product toward the end of A.D. 2000.
Microactuation would be a major enlargement of the business horizon of HTI. Suspensions are passive mechanical assemblies. TSA's are composite electrical and mechanical assemblies. Microactuated suspensions would be dynamic electrical and mechanical composite assemblies. Those are each different businesses, each with a performance and cost envelope overlapping the previous one. Microactuation was talked about in the magnetics circles of the drive designers in the late 80's. The notion then was as a possible solution to non-repeated runout errors (irregularities in the ball bearing grease threads). It was tough to do more than talk when the component manufacturers did not work on prototyping and testing. Resonance was largely the rallying cry then for suspension assemblies, and drive assemblers squeezed hard on costs with a nickel or dime in the more expensive components often being a big deal then. Now for microactuation, with the advances in electronics, there is both a separate mechanical and separate electrical solution to the microactuation issue. Or both approaches could be hybridized for amazing performance.
I would like to see HTCH making scads of cash out of TSA for several years to pay back the mountain of costs absorbed for the nearly two years delay after HTCH indicated they were making TSA commercial, and TSA would be a going concern. I am relieved the 'bet your company' approach looks like it made it through on TSA. I feel a little uncomfortable with the thought that microactuation might be the next larger grail (and major bet), before the TSA initiative proves that effort was economically worthwhile.
Seagate has tooth. Both HTI and Seagate in recent years have had public frictions over development personnel. I think it more than possible for them to work together effectively. However, Seagate is the bigger gorilla. Effective joint development efforts require a capable, committed, and sufficiently resourced executive to champion the cause to their respective companies and keep the spirit of mutual benefit alive through constructive synergy. As dynamic as the business and staffing of these firms, I wonder if they would really have the guys to make it work through thick and thin. It often boils down to if the partners are equal in capability and contribution, or if they are not equal. The less than equal relationships are problematic. My suspicion then is that ideally these cooperative developments are not key to any of the partners future. If the HTCH-SEG development was a veiled tell HTCH what you want and we will build it for SEG, then that is an old shoe that would fit. No concern. Business as usual. If the goal is to better IBM and others, then the partners have to be world class developers to make the best go of it. For me, that is a fuzzy vision.
I agree that announcing substantial and ongoing programs with Fujitsu would be an excitement factor for HTCH. Such news, if to that extent, would be taken as an immediate litmus test of TSA. I would hazard something like a 10% stock price rise--a couple dollars--would be in order.
It's fun to philosophize occasionally. I would like to see outstanding performance and a clear payoff for the costs of TSA. The proof is in the doing now for HTCH. I'm optimistic.
Best regards,
m |
