The failure of MiniStor Peripherals International Ltd, one of the companies that pioneered 1.8 disk drives (CI No 2,641) is the clearest indication yet that the market for the miniature drives has not developed into the lucrative business everyone thought it would back in the early 1990s. Then, the drive towards miniaturisation led to the establishment of MiniStor, Integral Peripherals Inc in Boulder, Colorado and Calluna Technology Ltd in Glenrothes, Scotland, specifically to develop 1.8 drives (CI No 1,690, 1,558 & 2,073). Established disk drive makers like Seagate Technology Inc, Maxtor Corp and Western Digital Corp expanded their ranges to include 1.8 offerings, and everybody expected their products to be snapped up by Personal Digital Assistant and sub-notebook makers. But this has not happened. Only Integral Peripherals and Calluna are still producing 1.8 drives in volume and all the big manufacturers have either canned their development plans or put them on ice. Maxtor, after making a considerable noise last year about going after a major chunk of the PC Card market (CI No 2,504), has since decided to mothball its product. It says it de-emphasised its plans for the MobileMax because the market was slow to develop, it was not an established form factor, and, more tellingly for a company that has only just managed to show its fir st profitable quartersince the fourth quarter in 1993 (CI No 2,651) , the products were not making any money.

Shelved

It says it will revisit the market’s possibilities when it believes that it is more developed. Western Digital and Seagate pulled out of the market about 18 months ago, for much the same reasons as Maxtor, and both say they might re-enter if it picks up. Even Chatsworth, California-based Micropolis Corp which, along with members of a consortium it was leading, was to have received $10m from the US government to develop a 1Gb, 1.8 disk drive (CI No 2,535), has dropped out. Admittedly Micropolis shelved its plans in March, before it had even received the government money, because the rest of its business was in disarray. Also, it didn’t believe it could get a 1Gb product within the timeframe the sponsors wanted, even though it looked to be on. And none of the other consortium members has stepped forward to take the helm and pursue the 1Gb goal. Disk/Trend Inc, in Mountain View, California, which the acknowledged world expert on the hard disk market, says that in 1993, the last year for which it has figures, only around 150,000 drives were shipped. Last year when it reported on the whole market (CI No 2,551), it estimated the 1994 figure at 450,000 but now says that it doubts this will have been reached. It firmly blames the failure of the format to thrive on the low capacities, saying they have been too low to be of any real interest to notebook makers or to warrant developers’ time to build applications, although it believes the technology exists to put 1Gb on a 1.8 drive, as do manufacturers like Integral Peripherals, which has a 500Mb 1.8 drive already, will have a 800Mb one next year and expects to have a 1Gb in the near future. But while Disk/Trend says the market is not growing at the rates it once believed that it would, triple digits, it does not believe the market will disappear.

By Maya Anaokar

This is quite a different view from that held by analysts over at International Data Corp. Vienna-based Bob Payton said, If you were disappointed by the size of the 2.5 disk drive market, then you’ll be devastated by the 1.8. He believes the market will atrophy to all but niche sectors, such as the automotive industry, with no chance of notebook manufacturers using 1.8 drives, simply because they are too expensive and do not have the capacity demanded by modern operating systems and applications. Payton said that if any small form factor drive was going to be a success it would have been Hewlett-Packard Co’s Kittyhawk (CI No 1,939). This was a 1.3 Winchester that measured 2 by 1.44 by 0.4 thick, weighed less than an o

unce and had 21.4Mb and 42Mb capacity. Hewlett-Packard planned to use it in its OmniBook but just six months after announcing the 42Mb version it decided to kill the Kittyhawk, saying the target markets had not materialised (CI No 2,497 ). This failure of markets is the recurring refrain and the reason MiniStor cites for its demise. Even the money Hitachi Ltd gave it, and that deal was thought to have been worth $10m, to develop high-capacity 2.5and 1.8 drives was not enough to save it (CI No 2,250). Jim Miller chief executive and president of MiniStor blames the failure of pen-based systems and sub-notebooks for the company’s bankruptcy, and although the company diversified into 2.5 drives, Miller said, the money had run out. He agreed with the theory that the drives will eventually be successful in a non-classical market, but he warned that at the moment, the market isn’t even large enough for one company. But Integral Peripherals and Calluna, the last companies at the table, are far more upbeat than everyone else and if Miller was right about the size of the market, then Micropolis’s false start, MiniStor’s demise and the withdrawal of the big manufacturers are probably good reasons for the optimism. Vlad Langer, Integral Peripherals’ vice-pre sident of sales and marketing, acknowledged that the growth in software storage demands had eclipsed 1.8 drives’ capacities.

Poor perception

It’s like chasing a running train, said Langer who pointed out that areal density for 1.8 drives was only rising at the same rate as that of other drives. But Langer believes the capacity demands of notebooks will eventually slow down and with PC Card slots almost standard on all notebooks, a 1.8 PC Card-type drive will become another desirable accessory. He admitted the company couldn’t put a figure on the money it will have to invest or how long it will have to wait until this day comes, which partly explains why it is diversifying into 2.5 drives ( CI No 2,654). It says demand from two unnamed notebook makers, one in the US and one in Japan, tempted it into the market, as did Samsung Electronics Co Ltd’s multi-million dollar investment in the drive it is developing. The drive will be a low profile 1Gb 2.5 drive and will ship at the end of the year. Over at Calluna, managing director Norman White also believes there is a future for 1.8 drive. He said the company was seeing the market for PC Card 1.8 drives growing steadily and that the rate of growth was increasing. And he took issue with the predominant idea that capacity was to blame for the market’s failure to boom, saying Calluna had excellent demand for 200Mb drives. It’s simply that there’s a poor perception of what they can be used for and how they work. We find in Europe that the pull-through for retailers through distributors is clearly on the up, White declares.