History (1993): Innovative Plans of HDD Maker Kalok

From its beginning in 1987, Kalok Corp. (Sunnyvale, CA) grew to an organization with almost $80 million sales in 1990.

Between 1987 and 1991, it delivered almost 2 millions 20 to 40MB 3.5-inch drives designed by Steven Kaczeus, a well-known engineer in the HDD industry.

While the company had early on established a reputation for design innovation, it experienced chronic difficulties controlling its manufacturing operations. High costs, recurring failures and inability to meet volume manufacturing goals characterized the subcontracting agreements that had been put in place with 2 undercapitalized Asian manufacturing partners including the South Korean Oriental Precision, now under Chapter XI.

Meanwhile an attempt to establish a proprietary manufacturing facility in Philippines failed due to underfunding and a contamination defect which led to a sizable product recall. By early 1992, Kalok had become insolvent and burdened with approximately $40 million in debt. The plant was sold to Xebec who keeps on manufacturing and selling 40 to 121MB 3.5-inch drives.

Note that Xebec recently unveiled a low-profile 245MB 3.5-inch drive, the XE3245, with embedded AT/IDE or SCSI controller (13ms seek time, $325 for an evaluation unit, shipped in summer time).

Kalok transferred the technology to its manufacturing subcontractor, in exchange for cancellation of approximately $25 millions in debt.

But ever since Robert E. Martell arrived as CEO in early November 1992, the company has been quite active: the firm is focusing on its best product, Point5, a 250MB drive only one half-inch high, the thinnest 3.5-inch unit in the industry; manufacturing agreement with DZU (StaraZagora, Bulgaria) and Teac in Japan, both companies making investments in Kalok; appointment of Actebis Computer GmbH in Soest and CTT in Munich as distributors in Germany.

“We will have all together three distributors in Germany which will represent 70% of the European market, then afterwards, one in each country,” said Martell.

He also explains that Kalok managed to erase $15 million in 2 months, and plans to change the firm into a public company in 2 years, when he expects the company to reach $250 million sales.

Martell also gave us extra information on the company’s future innovative products. After Points, there will be Point2.5 in 7 months, that will be so thin it will be able to replace a 3.5-inch floppy disk drive. This device will support a PCMCIA interface, which supposes it could concern all form factors, not only the 1.8-inch or less ones. As of September, a drive, the same size as Points, should be introduced, but this time with a double capacity, 500MB. Martell even plans to reach 1GBe next year, in the same form factor, with a SCSI interface.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠63, published on April 1993.

Note: Kalok bankrupts in 1994.