(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| Removable Drives to Replace Hard Disks, Industry Pioneer Says
August 27, 1998 (PENANG, Malaysia) -- Removable drives will replace hard
disk drives eventually, said industry pioneer Syed Iftikar, president
and CEO of Castlewood Systems Inc.
|He made his comment in an interview with Asia BizTech on Aug. 13, when
manufacturing for the company's ORB 2.16GB magneto-resistive (MR) removable
drive was launched by its first strategic partner, Trans Capital Holding
Bhd., a local contract manufacturer.
Syed was the founder of SyQuest Technology Inc. and co-founder of Seagate
Technology Inc., where he invented the 5.25-in. hard disk drive.
Castlewood Systems was founded in September 1996 and is a privately-held
company based in Pleasanton, Calif.
Syed is pioneering the use of MR technology and Giant Magneto Resistive
(GMR) technology licensed from IBM Corp. in removable drives.
Asia BizTech: The disk drive industry is in crisis with weakened
demand, staff layoffs and restructuring among the players. It seems
awkward that a new player is entering the fray under these circumstances,
especially with manufacturing partners based in Asia. Can you comment
on your move?
Syed: Being an entrepreneur and a pioneer is never easy. But change
is important. We have succeeded in making a high capacity, fast product
which no one else can rival in terms of performance and cost.
The ORB is the first removable 3.5-in. MR cartridge drive with a capacity
of 2.16GB and data throughput rate of 12.2Mbps, the fastest transfer
rate of any removable media product available today, making it completely
Castlewood will solely focus on R&D; and marketing and leave assembly
manufacturing and supply of advanced components to our partners. We
don't expect to have layoffs. I chose Penang because I want to make
it the capital of the removable drive industry of the world, the way
Singapore is now known as the leading hard disk drive supplier of the
world. I think we can achieve this by the year 2000.
(Removable storage market leaders Iomega Corp. and SyQuest Technology
Inc. already make the majority of their products out of Penang-based
plants. -- Asia BizTech)
Asia BizTech: What kind of targets has Castlewood set for itself?
Syed: Our research indicates we have a demand for over 10 million
drives a year from both OEM and retail channels valued at US$2 billion.
Every OEM the company has spoken to has expressed the need for large
By March 1999, with two plants in Malaysia and one in Japan, we expect
to ramp up manufacturing to about a million drives per quarter, and
even that won't be enough. We may license Sony Corp. and Acer Inc. for
Our next product will have a capacity of between 2GB and 10GB.
By the year 2000, we will have the technology and capability to produce
10GB drives using GMR heads at a very low cost. It'll be like buying
a Ferrari for the price of a Volkswagen.
As long as we continue that strategy and we don't fall off that path,
then we are safe.
Asia BizTech: Various proprietary technologies seem to be competing
for the same desktop space. Why should the ORB succeed?
Syed: The ORB drive outperforms other removable drive technology
such as magneto optical, optical DVD, inductive head, high-density floppies
and tape. Iomega has a very expensive MR product which they are redesigning
for low cost, while SyQuest has a low-cost product with limited capacity.
With an ORB drive you get a very fast, high capacity drive at an affordable
The CD-ROM took five years to become popular as it was priced at US$250
when it was first introduced. Only when it broke the US$99 price barrier
did it become popular, and DVD drives are going through the same thing
-- they're too expensive. Price is the magic. The ORB drive retails
at US$199.95 with one disk for consumers and US$149 for OEMs integrating
it into PCs. Additional 2.16GB cartridges are priced at US$29.95.
Over time, we expect to sell our drives at US$99, and through joint ventures
with Sony Corp. and Hitachi Maxell Ltd., we will introduce the next-generation,
low-cost cartridges that can store and play a full-length movie for
only US$10. If you buy three cartridges, that's a total of 6GB at US$130.
You cannot buy a 6GB drive today for that price. The ORB is a far more
viable alternative for upgrading capacity, backup and transport applications,
and downloading huge multimedia files from the Internet.
Asia BizTech: Is the PC market the primary market for the ORB
Syed: Information comes in three formats: text, audio and video.
Video is the new face of technology, and that is why we're targeting
the VCR and set-top box markets as well.
I see a new class of computers, low-cost PC-TVs, priced under US$1,000,
emerging possibly with integrated ORB drives. Instead of using the VHS
tape, consumers will also be using video recorders with ORB drives.
It will have digital quality video and sound. No more time delay when
rewinding, and there will be fast forwarding, all instantaneous.
Sanyo Electric Co., Ltd. already has a product called HDR-1 which incorporates
an ORB drive and will be available on the shelves this Christmas season.
Aiwa Co., Ltd. will follow soon after with an ORB drive product in its
digital home systems product.
We are also in talks with movie studios to make ORB cartridges a preferred
storage medium for distribution.
Asia BizTech: Do you think removable drives will one day replace
Syed: I firmly believe so. The market is gradually switching to
removable drives. Eighty percent of PC consumers do not need more than
2GB of storage anyway. Only professional users need higher capacity
and performance and that is a small market. With our next-generation
product, consumers will not need a hard drive when you can buy a removable
drive for much cheaper over the long run. No need for costly upgrades
Asia BizTech: Do you have plans to list the company? Are you afraid
of being bought out?
Syed: We plan to list on the NASDAQ by July next year. Currently
the company is controlled by various private investors. If anyone wants
to give us a US$1 billion, they can buy us out.
(Julian Matthews, Asia BizTech Correspondent)