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Technology Stocks : DSS: DLT finally open for trading -- Ignore unavailable to you. Want to Upgrade?

To: Z Analyzer who wrote (275)	7/14/2000 1:21:45 AM
From: Sam	Read Replies (1) \| Respond to of 488

Well, I just listened to both the Seagate and the Exabyte CCs. Just a few comments on those parts of them that are relevant to DSS: (a) Mariner threw down the gauntlet to DSS by saying that he/Exabyte is "increasingly skeptical" that SDLT will be shipped in any volume this calendar year. Later on in the call, he said that "if" [his emphasis in tone] SDLT is shipped this year, it won't be with backward compatability, and this will hold up shipments in the same way that it held up M2 shipments (he said that they finally started shipping M2 with backward compatibility in late June, but it was unclear to me from what he said if the OEMs had actually qualified it yet, or were in the process of qualifying it). It will be disappointing to me if SDLT doesn't ship by Sept., even if w/o backward compatibility. I'm sure he is right in saying that not having it will slow sales of the drives, but right now, they need to get the some product out the door, perhaps with free upgrades when b/c does become available. Of course, it would be worse if the product isn't reliable. So we'll have to see next week what Quantum has to say about it. At least DSS has been up-front about this issue for a long time now, while EXBT sprang on us only when they thought they had the problem finally resolved. For whatever that is worth. (b) Mariner also said that he thought that LTO was getting close, especially HP and IBM. He thought that they might start limited shipments in this quarter. They are building 3 libraries for LTO, all of which will be ported to both M2 and SDLT. However, Seagate said in their CC that they would go into volume production of their Viper 200 in late August. I haven't heard or read anything about HP and IBM plans recently. (c) Seagate said that Maxell, Fuji Photo, and Hitachi had all qualified media for LTO, which they regard as a "milestone" event. Of course, media w/o drives won't have much of a market, but then neither will drives w/o media, so we'll have to see on this one too. (d) Mariner gushed over the growth in library revenues, from 11 to 16 million dollars. Well, geez, ATL has been showing that kind of growth from a couple of years now. One would hope that M2 library revenues would grow, since it is a new product. DLT library revenue also showed growth to $2.6m, he said (that was in the 16m library rev.). Well, it wouldn't be too surprising to me if DSS wasn't being all that forthcoming to EXBT about their progress, given the way Exabyte publicly bad mouths them and given the low level of revenue that they generate for DSS. (e) Exabyte is down to $12m in cash, they burned $10m last quarter. Mariner was quick to point out that they were cash positive in June, and actually recorded their first profitable month in years in June, so the trend was good (though he also said that more than half the revenue of any Q is in the last month, so don't draw any great conclusions from this). He put profitability as possibly occurring in Q1 or Q2 of 2001, pushing it out due to the backward compatibility issue. He projected positive cash flow in Q4 of this year. They are still in a precarious position. If neither DSS nor LTO come out with their pdts soon, their position will certainly be much better, but if SDLT and LTO do come out in the next couple of months, I would still have to wonder if EXBT might not go the way of Syquest by this time next year. Sam