IRVINE — In the Irvine Spectrum Business Park, Pinnacle Micro Inc.'s two-story building looks up to Western Digital Corp.'s 14-story headquarters like David looked up to mighty Goliath.
Barely a stone's throw apart, these computer storage companies have lived in peaceful coexistence for years, because a technological wall separated their industries. But with the advent of multimedia technology--where computers combine sound, text, graphics and video to produce film-like images--the neighbors may soon become adversaries.
Pinnacle, a maker of optical storage devices begun by a father-and-son team in 1987, senses an opportunity and is readying its slingshot. Western Digital, an established maker of magnetic disk drives with $1.2 billion in annual sales, said it is not worried that it will suffer Goliath's fate.
Each company's products perform the same basic function: storing computer data. Whichever can do that better at the best price will have a future; the other may be left spinning in the dustbin of history.
"We have a lot of skeptics out there," said Scott Blum, who co-founded Pinnacle Micro Inc. with his father, Bill.
"Our belief is that optical disks will be around 30 years from now and magnetic won't exist," said the younger Blum, who serves as executive vice president. "This is what we've worked on for seven years. It's David versus Goliath."
At stake for the winner is a share of the multibillion-dollar storage industry, where demand is expected to explode with the fast-approaching information superhighway's vast appetite for data storage.
Not every computer user cares who survives this battle. However, it matters to tens of thousands of workers--from engineers to assembly line workers--who make their living in the PC storage industry, which so far has remained largely American-owned despite strategic efforts by foreigners to grab a foothold.
The $700-million optical disk-drive industry is puny next to the $8.3 billion spent on magnetic hard disk drives each year, based on estimates by market researchers Disk/Trend Inc. in Mountain View, Calif., and Freeman Associates Inc. in Santa Barbara. The size of the magnetic disk drive industry mushrooms to $23.6 billion when sales of stand-alone drives are included, in addition to those sold as part of computers.
It will be difficult to mount a serious challenge to the magnetic disk drive manufacturers, who grew on the enormous success of the personal computer. The disk drive serves as the permanent memory system for the PC.
But Pinnacle's executives believe business and home users will eventually favor their type of storage system, which is expected to undergo a major enhancement next year, while rivals run into technological obstacles.
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Scott Blum said Pinnacle is set to release its enhancement project, code-named Diablo, in the spring of 1995. For the first time, he said, an optical disk drive will cross a threshold and cost less than similar high-capacity magnetic disk drives.
Blum, 30, said Diablo will force magnetic drive makers to take notice. Pinnacle's best drives are priced at $3.80 per megabyte, compared to 75 cents per megabyte for standard magnetic drives, but with Diablo, the company hopes to greatly reduce the price gap.
Executives at the magnetic hard disk companies dismiss such claims as extreme optimism.
"The epitaph of the disk drive industry was written in the mid-1980s when optical first appeared," said Peter Knight, vice president of business development at Conner Peripherals Inc. in San Jose, a top disk drive maker. "Many theorists stood up and talked about how the fundamental limit of the disk drive was coming. I thought optical would be a serious challenger. As time goes on, it's clear that isn't the case."
Gary Marks, vice president of marketing at Western Digital, believes optical drives will remain but a small part of the total storage market.
"We don't have tunnel vision," Marks said. "There will be peaceful coexistence between hard disks and optical for a long time."
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Marks' view is shared by industry experts such as Bob Katzive, a vice president at Disk/Trend Inc., and Phil Devin, storage analyst for Dataquest Inc., a market researcher in San Jose.
"We don't see optical drives as a replacement for the magnetic hard disk," Katzive said. "They're good for storing things as archives. But if you need to (change) it fast, the hard disk drive is better."
Basically, an optical drive uses a laser to read bumps and grooves on a metal platter, like a compact disc player. In magnetic disks, a mechanical head reads the magnetic pattern on the metal disk.
In both technologies, the disks spin past a head, which reads the data or changes it based on commands from the computer's main processor. Optical drives are a newer and fundamentally more complex technology because they use lasers to read the data.
