Zitel Corp, Fremont, California is in a flap because IBM Corp is phasing out its early generation Ramac 2 in favor of the new Ramac 3 – both IBM products although some Storage Technology Corp arrays are also called Ramac 3. IBM is still selling some of its own Ramac 3 products, and both IBM products use Zitel technology; and the company says that royalties from IBM were impacted during the second quarter. It also said that it is uncertain how the transition will affect future royalty payments. Zitel lost $1.9m – the equivalent of $0.13 a share – on sales of $2.8m in its second quarter ended March 31. In the corresponding quarter last year, Zitel earned $984,000, or $0.06 a share.