A pact between Chatsworth-based Computer Memories and Atasi under which Computer Memories was to have made and sold two hard-disk drives similar to those made by Atasi has unraveled, according to Donald Lundell, president of San Jose-based Atasi.
Lundell said Atasi was told last week by Computer Memories that it is backing out of the tentative agreement, announced Oct. 1. Computer Memories gave no reason for canceling the deal, he said.
The pact would have allowed Computer Memories to make and sell products similar to Atasi's 85-megabyte and 170-megabyte hard-disk drives, which are memory devices for personal computers. Those disk drives can store more information for computers than existing Computer Memories disk drives and also use Atasi-developed technology that allows a computer to retrieve data faster and more accurately.
Favorably Viewed by Analysts
Analysts had responded favorably to the announcement of the agreement, noting that it would allow Computer Memories to expand its product line and attract new customers in the wake of a decision by IBM in August not to renew its contract to buy disk drives from Computer Memories. IBM accounted for 81% of Computer Memories' $50.5 million in revenue in the quarter ended June 30.