<Show: CAVUTO BUSINESS REPORT>
<Date: June 10, 1998>
<Time: 00:00:00>
<Tran: 061004cb.140>
<Type: INTERVIEW>
<Head: SyQuest CEO>
<Sect: Business>
<Byline: Neil Cavuto>
<Guest: Ed Harper>
<Spec: Business; Computer Hardware Industry; SYQT (Nasdaq); SIC: 3577>
<Time: 00:00:00>
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NEIL CAVUTO, THE CAVUTO BUSINESS REPORT: Here to give us all the
details, Edward. Good to have you.
ED HARPER, CEO, SYQUEST: Good, good to be here, Neil. I appreciate the opportunity.
CAVUTO: You, I didn't know, between Imation (Company: Imation
Corporation; Ticker: IMN; URL: imation.com and what we got with Iomega (Company: Iomega Corporation ; Ticker: IOM; URL:
iomega.com and you guys. This is getting to be a crowded
field, isn't it?
HARPER: The field that actually we play in is really only two
competitors, really, in the same field. Us and Iomega.
CAVUTO: The superstorage, right?
HARPER: Because we really compete in a space that is characterized by hard disk storage like capacity. That is, we can offer a gigabyte of storage at a very affordable price, and with the same performance of that of a hard drive.
CAVUTO: In one disk, right?
HARPER: In one disk, that's right.
CAVUTO: Let me ask you something. Tangentially, when Western Digital (Company: Western Digital Corporation ; Ticker: WDC ; URL:
wdc.com comes out that they've got a disk drive maker and
says, look, we've got problems. Asia is a problem. They're cold, near pneumonia?
HARPER: We, to a lar-to a certain degree, we get painted with that same brush. Absolutely, we do. So, when people talk about woes in the storage sector, to a large degree, we get tarred with that same brush.
CAVUTO: The part of the brush is this. As you know better than anyone, Ed, that you guys are tripping over each other trying to offer the latest, greatest product and while you offer consumers a great deal of bang for the buck, there's not much of a buck leftover for you. Where one of the reasons why your first quarter was a net loss of 31.7 million bucks?
HARPER: We're continuing to put the processes in-place, in the steps -- we're taking steps to address all of those issues. First, we want to increase our distribution and our volume of the products that we're offering the marketplace. With our award winning Spark product, we have the best solution for customers in the industry today.
CAVUTO: Now, the Spark product is the one that could store a gigabyte, right?
HARPER: That's correct. For each cartridge, you get a gigabyte.
CAVUTO: For each cartridge.
HARPER: And it only costs you $33.
CAVUTO: OK. Now, Iomega has one that will be 2 gigabytes.
HARPER: Yes they do. However, the cartridge price for that is $149 and the disk drive itself is almost $500. So, the ..
CAVUTO: So you argue that you're more cost-effective?
HARPER: Absolutely.
CAVUTO: Let me ask you something about that though. It's slowly
happening, hence your Compaq (Company: Compaq Computer; Ticker: CPQ;
URL: compaq.com deal today -- where, and manufacturers are including these. Whether it's SyQuest (Company: SyQuest Technology Incorporated; Ticker: SYQT; URL: syquest.com or Iomega or Imation in a separate type of a deal, on their systems. But very slowly. Why?
HARPER: Well, as - as everybody really has a hard disk system in their computer system, it's a part of everybody's expectation. But as we move to the lower cost units, there is less and less storage in order to achieve the price points that's available. We look at that as a huge opportunity for additional storage space, and that's a perfect solution for our award-winning Spark product.
CAVUTO: But it's not a solution for a built-in Spark product, right?
HARPER: Well, no, in the case of Compaq, for example, as people
configure those systems and realize the need for additional storage,
those systems are actually built-in.
CAVUTO: But let me ask you something, Ed. If someone is getting a Sub-$1000 system, they obviously don't want a lot of bells and whistles, right? So, would they - no offense to you - would they say, I don't need this?
HARPER: They - they might at the outset. On the other hand, once you connect that system to an Internet, and find that there's only 1.2 gigabytes or in the case of the really expensive ones, they're the $1,000, 2.1 gigabytes, you don't realize how fast that will fill up.
CAVUTO: Did Imation though steal some thunder by saying you take the typical floppy and you store a lot of information on it? Maybe not as much as yours, but enough that people who don't do a lot of computing could say, that's good enough for me.
HARPER: Well, they're, you know, those devices are adequate for a lot of usage. When you actually need to use them like a hard disk, the performance characteristics, in addition to the capacity, would lead you -- to the correct choice. And that's Spark.
CAVUTO: Where are we going with all of this? Not all of you can
continue to thrive together, can you?
HARPER: I'm not sure that's true, Neil. The reason that I think that's not true is we think there's a huge marketplace out there. In spite of the success that's been enjoyed by Iomega and others in the industry as well, there are still - you know, over the past three years, there's only been 14 or 18 million of these drives produced.
CAVUTO: Wow.
HARPER: Agaist a run rate of 150 or 160 million PC. So that's a 90 percent opportunity.
CAVUTO: All right, we'll see what happens. Ed, I want to thank you very much.
HARPER: Thank you, Neil
CAVUTO: All right. You can stay here just a little while longer. Ed Harper is the Chairman & CEO of SyQuest, getting a lot of headlines, and certainly a lot of attention on Wall Street today.
END
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