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A prototype of Iomega's DCT Cartridge. Courtesy of Iomega, with modifications by Michael R. Tomkins. Iomega DCT: "Clik!" disk gets a major capacity boost
(Sunday, July 27, 2003 - 15:36 EDT)

Iomega Corp. has announced a new removeable storage technology based around a tiny stainless-steel cartridge that offers an extremely useful 1.5GB of rewriteable storage in a package about the same size as a matchbook..

The new DCT ("Digital Capture Technology") cartridge is being developed by Iomega in cooperation with Fuji Photo Film Co. Ltd., Citizen Watch Co. Ltd. and Texas Instruments. Each DCT cartridge weighs 9 grams - a little over half the weight of a Microdrive (around 15 to 16 grams). Where the Microdrive can be used in a standard Type-II CompactFlash slot, however, the DCT requires a proprietary drive - meaning that products must be built around it. Working samples of the DCT cartridge and drive are currently available and, says Iomega, "are now being evaluated by a select group of premier OEMs".

Iomega tells us that the expected transfer rate of the DCT cartridge will be 7.5MB / second, although they don't specify if this is for read or write, and whether it is a burst or sustained rate. In the parlance adopted by Lexar to describe its flash memory cards, 7.5MB / sec would be roughly equal to a 50x card (at least, if this is a sustained write speed and not a burst speed). By comparison, the fastest CompactFlash cards have sustained read and write speeds of around 6MB / sec, with burst speeds of over 15MB / sec. IBM's 1GB Microdrive is rated at 4.2MB / second read or write sustained...

Iomega is planning for the first DCT-based products to reach the market in the second quarter of next year. Texas Instruments will provide digital signal processing technology to turn the weak analog signal provided by the drive head into a digital signal. Iomega itself has designed a new anisotropic magneto-resistive (AMR) drive head, and the drive units will be manufactured by Citizen. Fujifilm is providing its "NANO CUBIC" thin-film magnetic media coating technology, which was announced late in 2001, for the DCT cartridges.

This is not the first time that Iomega has cooperated with these specific companies. Both Iomega's "Zip!" and "Clik!" media were based on Fuji's ATOMM technology, Texas Instruments provided DSPs for both products, and Citizen manufactured the "Clik!" drive. As you'll see shortly, the history of "Clik!" could be seen as a portent for the obstacles DCT will face, and we hope all four companies have learned lessons that will help DCT avoid these same stumbling blocks.

If you've ever seen an Iomega "Clik!" disk (which had a capacity of 40MB, not bad back in 1998), then by looking at the press photo below, it will quickly become apparent that the form-factor of the DCT cartridge is essentially identical to the "Clik!" disk. We've not included it in our cropped version of the photo, but the original included a ruler that showed the dimensions of the cartridge to be roughly two inches square, the same size as "Clik!". Iomega has confirmed for us that the photo is not of a "Clik!" disk, but of a prototype DCT cartridge alongside a matchbook for scale. Since the "Clik!" design is being altered to make the new DCT format, it may be that some of the tooling and components that were developed for "Clik!" can be reused - perhaps saving money on development and tooling costs.

Iomega's DCT cartridge, shown alonside a matchbook for size comparison. Click for a bigger picture!

DCT certainly looks to be an interesting technology, and if the specifications are right, a 1.5GB removeable and rewriteable storage device could be ideally suited to digital camera use. That said, DCT is not the first such new media we've seen offered as a potential match for digicams. One needs only think of the ill-fated Dataplay - an optical storage technology that was similarly small and light, rewriteable, and could hold up to 500MB on each disk. Dataplay disks and a handful of products that could accept them did make it to market briefly, but almost immediately disappeared as the company went bankrupt. (The last we heard a month or so ago, Dataplay had emerged from bankruptcy to try and sell its format once again).

To be sure, DCT is backed by much bigger names, but introducing new storage media is a difficult and expensive process. Adoption of a completely new media format is a difficult "chicken or the egg" situation. The developer must persuade both manufacturers and consumers that their new media has benefits that make it worth gambling on a new technology which isn't guaranteed to succeed - and retailers to stock media for a technology that is not yet widespread. Should the format fail, manufacturers could be left with products they can't sell, and consumers could find themselves unable to buy new media for the products that already sold. To persuade adoption, costs of both media and drives must be kept competitive from day one - a difficult proposition given the likely high development costs.

Iomega itself has already learned this in the past. The company launched "Clik!" media in 1998 - and succeeded in getting a Clik! drive in the "Agfa ePhoto CL30 Clik!" digital camera the following year. This would be the only camera to support the technology directly; the following year, "Clik!" was renamed "PocketZip", and finally the format was discontinued early last year. PocketZip disks are still available - presumably from old stock, and with prices at many retailers being noticeably higher than when the format was current. Sooner or later, consumers with PocketZip products will find themselves unable to obtain new media altogether, and as existing media fails, products based solely on the format will be rendered unuseable.

The market for storage media in digital cameras is extremely crowded already, and very competitive. Of all the existing formats, only one product based on a rotating platter has been a commercial success - the Microdrive, a product which avoided adoption problems by shoe-horning the technology into the existing, extremely popular CompactFlash form factor. (Of course, you could argue that floppy-disk based cameras were a success, but that was a uniquely American phenomenon - they didn't sell nearly so well overseas, and their days are essentially over now anyway with only a couple of models still available). Should DCT have what it takes and prove well-suited to digital cameras in terms of cost, speed, reliability and power consumption, we'd love to see Iomega and its partners have great success - but we predict the road ahead will be a long and difficult one.

Original Source Press Release:

Iomega Corporation Announces Breakthrough Miniature 1.5 Gigabyte Removable Storage Technology

Working Samples Released To Original Equipment Manufacturers (OEMs) for Evaluation of Technology for use in Next Generation Consumer Electronics Products

SAN DIEGO, July 22, 2003 Iomega Corporation (NYSE: IOM), a global leader in data storage, today announced a new 1.5 GB digital capture technology (DCT) platform designed for a new generation of digital entertainment products, including camcorders and portable video players, as well as portable PCs and smart handheld devices.

Working samples of Iomegas new breakthrough DCT drive and fully rewritable cartridge are now being evaluated by a select group of premier OEMs. The DCT cartridge, which is about the size of a half-dollar coin, weighs only 9 grams and employs a rugged stainless steel cartridge designed to protect important digital content from data loss, enabling truly mobile digital devices. Iomegas DCT platform partners include Fuji Photo Film Co. (Fujifilm), Ltd., Citizen Watch Co., Ltd. (Citizen), and Texas Instruments (TI). Iomega is working with other innovative companies with the goal to integrate DCT technology into their future products, and is progressing on a DCT development timeline that would enable potential OEMs to bring DCT-integrated products to market in the second quarter of 2004.

Existing portable storage solutions in todays consumer electronics products are too expensive, too slow, too fragile, or too power hungry for the coming generation of mobile devices, said Werner Heid, president and CEO, Iomega Corporation. Iomegas exciting new DCT platform is different. It is being designed to offer the industry a low-cost drive with high capacity in a convenient form factor. It is a product designers dream because it can provide high capacity, rugged, shock resistant storage at low power consumption for small portable devices such as next generation camcorders, personal video recorders and tablet PCs.

DCT Technology Alliances

Iomegas DCT platform incorporates key enabling technologies from leading companies including Fujifilm, Citizen and TI. Such enabling technologies include a new magneto-resistive (MR) drive head design developed by Iomega and NANOCUBIC magnetic media coating technology developed by Fujifilm.

Toshio Kawamata, general manager, Technical Division, Recording Media Products Division, Fuji Photo Film Co., Ltd., said, The media will provide potential recording capacity of up to 6Gb/square inch by applying Fujifilms new NANOCUBIC technology, which will be about 10 times higher in recording density than magnetic disks that are currently available. Fujifilm is looking forward to the presentation of this high density recording media through the introduction of Iomegas DCT platform.

Toshihiko Nakai, senior general manager, Information and Communication, Products Division, Citizen Watch Co., Ltd., manufacturer of the credit-card sized drive, commented: Consumers want lower power consumption for long battery life; they want higher data transfer rates for exciting new digital video applications; and they want higher data capacity for a new cross-platform media standard. DCT delivers on all counts.

Doug Rasor, vice president of strategic marketing, TI, said, TI is excited to be working with Iomega to drive its new DCT technology. We are looking forward to augmenting DCT with TIs real-time digital signal processing solutions to bring richer content, higher resolution and longer battery life to consumers.

About Iomega
Iomega Corporation provides easy-to-use, high value storage solutions to help people protect, secure, capture and share their valuable digital information. Iomegas award-winning storage products include the popular Zip 100MB, 250MB and 750MB drives, high-performance Iomega HDD Portable Hard Drives, Iomega HDD Desktop Hard Drives, Iomega Mini USB Drives, Iomega external CD-RW drives and the Iomega Floppy USB-Powered Drive. Iomega simplifies data protection and sharing at home and in the workplace with Iomega Automatic Backup software, Iomega Sync software, HotBurn CD-recording software, and Active Disk technology. For networks, Iomega NAS servers offer capacities of 160GB to 1.4TB. For unlimited capacity and anytime, anywhere access, Iomega offers iStorage secure online storage. Iomega also offers businesses and consumers a comprehensive data recovery services solution for recovering lost data due to hardware failure, file corruption or media damage. The Company can be reached at 1-888-4-IOMEGA (888-446-6342), or on the Web at http://www.iomega.com.

NOTE: The statements contained in this release regarding development, production and distribution of the Iomega DCT technology and product, anticipated product pricing and availability during second quarter 2004, the goal to have OEMs incorporate their product into their products, expected product performance and specifications including size, weight, capacity, ruggedness, cost, speed, mobility, power consumption and shock resistance, future applications for the new product and all other statements that are not purely historical, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are based upon information available to Iomega as of the date hereof, and Iomega disclaims any intention or obligation to update any such forward-looking statements. Actual results could differ materially from current expectations. Factors that could cause or contribute to such differences include, but are not limited to, technical difficulties or delays in the completion of product development and testing, market acceptance of, and demand for, the DCT product, any failure to achieve significant OEM acceptance of the DCT product, any difficulties encountered in ramping up production or other manufacturing or quality issues, including component availability and pricing, co-development, production, and distribution issues, product pricing and conformity to specifications, dependence upon third party suppliers and technical or supply difficulties at any such supplier, competition, intellectual property rights and other risks and uncertainties identified in the reports filed from time to time by Iomega with the U.S. Securities and Exchange Commission, including Iomega's Annual Report on Form 10-K for the year ended December 31, 2002, and its most recent Quarterly Report on Form 10-Q.

# # #

Copyright 2003 Iomega Corporation. All rights reserved. Iomega, Zip, iStorage, Active Disk and HotBurn are either registered trademarks or trademarks of Iomega Corporation in the United States and/or other countries. Certain other product names, brand names and company names may be trademarks or designations of their respective owners.

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