CORRECTION: Maxell Continues to Manufacture Tape and Optical Disc

Lawyer appointed by company vs. StorageNewsletter.com for correction! Do I dream?

This is a Press Release edited by StorageNewsletter.com on May 23, 2014 at 3:01 pm

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Below is a “Press Release” issued by Maxell on May 15, 2014 denying the statements in the news* that appeared in StorageNewsletter.com on May 14, 2014.
* Just Two Tape Cartridge Manufacturers Remaining, Fujifilm and Sony – Maxell and TDK quitting

Hitachi Maxell Refutes Inaccurate News

Hitachi Maxell, Ltd. (Maxell), parent company of Maxell Corporation of America, denounced as false a news that was recently published in StorageNewletter.com and possibly other publications.

Maxell categorically denies the information circulating that it has decided to cease manufacturing tape cartridge media and exit the optical media business. Maxell is a premier manufacturer of magnetic storage media and supplier of Maxell branded optical media and remains committed to these business categories. The information that was published was done so without the knowledge or endorsement of Maxell and is totally false.

Maxell has a long and rich history of developing and supplying data cartridges, which are highly compatible and durable for the backup market. The data cartridges also feature our original Ceramic Armor Metal Particles that are used in the production of many of our tape based products.

Currently, Maxell continues to develop and supply new storage media products for high capacity computer tape, such as LTO-7 cartridges, in order to meet the demands of the Ultrium roadmap, and new optical media products in order to meet market demand.

Maxell regrets that this erroneous information was published and has demanded that a retraction be published by any and all media that published the false information.

Comments

First note that this press release is not a regular one as all of them generally end with a contact name. Here nobody is listed and even not the web site of the publisher.

At the origin of this "affair" is an article published by StorageNewsLetter.com last May 14:
Just Two Tape Cartridge Manufacturers Remaining, Fujifilm and Sony
Maxell and TDK quitting

First we got by email a reaction of Alan Dripchak from Maxell. He wrote: "Interesting article for Today's Top News. Out of curiosity, would you care to share the source of that information, or at least be able to substantiate it?"

But as you know, journalists are not obliged to give the source of their information. Here we do partly an exception. We had two reliable sources.

The first one is an official document (see below) from Hitachi Maxell entitled: "Consolidated Business Results FYE March, 2014 April 28, 2014 Hitachi Maxell, Ltd."

It appears into this document that magnetic tape related business was 21% of Maxell's revenue in FY08, 7% in FY13 (as it was written in the article), but not anymore at all in new segments. Information storage media is also disappearing.

The second one was a confirmation of Maxell leaving storage media: an assessment of a German distributor essentially specialized in storage media, and even being a Maxell's reseller.

In fact we also were not surprised by this decision of Maxell. The tape market is going down since several years. And we even think that it was a good strategic decision for Maxell to stop this activity, following firms including Imation, TDK and Verbatim officially not any more manufacturing LTO media, and considering that Maxell is behind the two other remaining manufacturers, leader Fujifilm and Sony. There is no place for three LTO media makers as there is only two big OEMs for these cartridges, the two and only two manufacturers of LTO drives, HP and IBM. Further problem here will be for Maxell to continue to invest heavily in R&D to be in next generation of LTO-7 and -8, and beyond. Remark that both Fujifilm - with IBM - and Sony have recently announced new technologies able to storage 154TB and 185TB respectively into an LTO cartridge. Last news from Hitachi Maxell was the demonstration of a 50TB capacity LTO-class tape using PMR technology. It was in 2010... and then nothing else.

At StorageNewsletter.com, we were also amazed to read this additional email by Dripchak: "I'm sorry, but all communications going forward will be handled by our legal counsel."

It's the first time that we see somebody from a storage company asking a law firm (!) for one of our articles, probably trying to impress us. It can happen to be wrong into one of our articles - more than 30,000 news have been published in our web site. Usually, in this case, we receive a phone call from a PR of the company to quietly clarify the situation between gentlemen and we correct the information if we are convinced. That's the classical way of working in the press.

I'm Jean-Jacques Maleval, editor and author of the article on Maxell. In my career, with over 30 years of IT journalist, only once a reader threatens me to go to court for an article he disliked. But after consulting a lawyer, he immediately stopped chasing me, my sources being reliable.

Here Maxell hired Charles H. Friedrich, attorney at Scarinci Hollenbeck, LLC, a law firm in Lyndhurst, NJ, to handle the case vs. StorageNewsletter.com.

We accepted to publish the correction but formerly asked him two questions:

Where Maxell is producing currently LTO cartridges and optical media, and at which production rate?
Does Maxell intend to continue these two activities in the near future, at least until the end of the year?

He answered partly to the first one: "Maxell's magnetic tape manufacturing operations are ongoing at its factory in Kyoto, Japan."

Friedrinch also writes that, concerning the official Maxell's document above: "Change in the presentation of the results of operations is the result of a business restructuring. The magnetic tape business of Maxell (including computer tapes and professional video tapes) has now been consolidated into a new business segment (functional materials)."

We don't see this business segment "Functional Materials" in the document published here. It's rather "Industrial Material."

To conclude, we understand that Maxell is continuing its business in tape and optical media but we don't know at which production rate and for how long.

We will follow in the next months the Maxell's business to see if the Japanese company will continue in these markets until the end of this year as this short-term project was not confirmed by the manufacturer.