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Sony to relaunch removable storage effort

Sony wants to elbow into the data-storage market, but so far technical glitches have postponed the battle until later this year.

The company missed a golden opportunity and had to overcome technical glitches, but Sony is intent on elbowing its way into the removable data-storage market.

Sony later this year will relaunch its HiFD drive, a dense storage technology for PCs. The drives will compete with the Zip product line from Iomega, which has established monopoly-like market share despite internal problems of its own because of even bigger problems facing competitors.

While Sony's expertise can rarely be discounted in consumer electronics, the HiFD drive has proved to be something of a technical melodrama for the Japanese giant. Announced in 1997, Sony only started shipping the drives in very limited quantities in December of 1998. These, however, were withdrawn that same month when it was discovered that the drives had technical problems, confirmed Jim Leal, a spokesperson for Sony's Electronics Component Company.

Ultimately, Sony won't have the HiFD drive on the market until almost two years after its introduction. And some wonder if it will be too late to slow Iomega's momentum.

The HiFD drives, which store up to 200MB of data while retaining the ability to read current 3.5-inch floppy disks, were at the time of their introduction looking like a strong competitor in the market for removable storage technology. They were designed to offer higher performance and storage capacity than either Zip drives from Iomega or LS-120 drives from companies such as Imation, and all were anticipated to compete head-to-head for the slot reserved for today's floppy drives.

"While Sony has temporarily suspended shipment, we have not issued a formal recall of HiFD drives. Very few drives have reached end users," according to a statement on Sony's Web site. The few drives that reached customers were retrieved, said Sony.

Sony's problems are somewhat ironic, considering that the company invented the 3.5-inch floppy that is still the prevalent removable storage standard 18 years after its introduction. The misfires also reflect on how rapidly fortunes have been swinging back and forth in the highly competitive storage market.

"They were slow to come out; the time for them to strike was when Iomega was having troubles last year. Sony could've struck then, but they were nowhere to be found," said Michael Adams, research associate with Giga Group.

Iomega, while having won over the removable storage market, hasn't been immune to problems. The company was sued over product defects, saw its chief executive resign, and lost $54 million in 1998. In its most recent quarterly report this year, the company posted breakeven results after having to recall some defective power-supply units.

Syquest also felt the strain of competition. Last year, Syquest, the onetime leader in the removable storage market, filed for bankruptcy and had its assets purchased by Iomega.

Iomega won't stand still for Sony's fall product introduction. Already, the original Zip drives, which store 100MB of information but are not backward compatible with floppy drives, are now priced at around $100, while a newer version that can store 250MB of data is offered for around $200. Sony expects to still sell its drives for around $200, although that could change depending on market conditions.

"We still see a lot of potential [in the market]. We are definitely counting on getting some [deals with PC makers] when we are ready," Sony's Leal said. The modifications needed to improve product reliability haven't been completed, so a relaunch of the product isn't expected until this fall, at earliest, he said.

When Sony is ready, they will offer versions that connect via parallel, USB, or PC-Card slots to a computer, with a IEEE 1394 version on the road map as well, Leal said.