The attractions of Storage Technology Corp’s automated tape library system has caused the bottom to fall out of the market for used IBM 3480 tape subsystems, Hesh Wiener writes from New York – and equipment dealers say the market will continue to fall. The reason is that large numbers of installed 3480s, both leased and owned by users, are being displaced by the Louisville, Colorado company’s automated tape library and 3480-equivalent controllers and transports. Three large users – rumoured to be Boeing, Kemperer Insurance, and American Airlines – plan to dump an estimated 400 IBM 3480s onto the second-hand market during the next few weeks, and even more 3480s are expected to follow in the spring so that an A22 controller, which lists for $56,930 and fetched $44,000 at the beginning of the year – 77% of list – had slumped to $36,000, 61% of list, by last week. Similarly, the current spot price for the B22 unit, containing two tape transports, is $17,000, just 43% of IBM’s list price of $39,840, compared with $23,000, 58% of list, at the beginning. Used units ordered for delivery in the future – in May or June, for instance – are being quoted as low as $33,000 for an A22 and $14,500 for a B22. As well as end-users who suddenly find their tape drives are worth a lot less than they thought, the slump in the price is hitting lease investors who have bought title in 3480s on the assumption that the things would hold their value as the old IBM 3420s tape drives did.
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