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BOULDER--In the early 1980s, SyQuest Technology, based in Fremont, Calif., revolutionized desktop publishing when it solved the problems of file interchange, and developed an inexpensive storage solution for the huge amounts of electronic space that digitized photos and art require.
By combining the portability of a floppy disk with the capacity and performance of a Winchester-type hard drive, the company provided file management capabilities and virtually unlimited storage for personal computers.
Inexpensive storage
Basically, SyQuest's products offered relatively inexpensive data storage, unlimited capacity. fast access and, when full, the user could just pop another disk into the drive. The drives are compatible with most over-the-counter PC platforms, and are available as external (plug-in) or internal (wire-in) peripherals.
Beginning with a standard-setting 5.25-inch, 44-megabyte removable hard drive in 1988, SyQuest developed several other variations on that theme to address specific market niches. Then, in May 1995, the company introduced the EZ135, a portable 3.5-inch drive designed specifically for the small office/home office (SO/HO) user.
With a manageable price of around $200 for the drive itself (the price depends on whether the device is internal or external), and about $20 apiece for the disks, the EZ135, developed in SyQuest's Boulder research and development facility, was expected to take the SO/HO market by storm. Unfortunately, Iomega, a Utah-based company, beat them to the punch with its Zip drive, which hit the retail outlets a couple of months before the EZ135.
According to a May 1995 industry report by Dataquest Inc., SyQuest's only hope to regain its market edge would be to take advantage of the pent-up demand whipped up by Iomega, and make its own drive price-competitive.
A tough call, since SyQuest was already in troubled waters.
Belly-flopping from a precarious perch of $17.75 on Dec. 31, 1994, SyQuest's stock today is worth about $5, after briefly nicking a December '95 price plateau of $10 on the way down. Prior to 1993. the stock peaked at $28.
The ensuing descent is an abrupt market response to...