Digital Tape Has a Role With Computers
In the 1980s, the consumer audio industry introduced compact disc players which, in turn, spun off three products that store computer data. Now, the computer industry has benefited by yet another consumer audio device, digital audiotape, or DAT.
The technology can be used to back up computer information banks.
There are about 10 major manufacturers worldwide of DAT devices, including giants Hewlett-Packard and Sony Corp., as well as smaller Southland corporations such as Archive Corp., WangDAT, Wangtek and Gigatrend.
Despite recent announcements from Digital Equipment Corp. and H-P that they will soon use DAT storage devices on their mid-range and workstation products, it will take some time before DAT significantly penetrates the $19.3-billion computer storage industry. The worldwide forecast for the DAT market is only $42 million in revenue for 1990, growing to a modest $148 million in 1994.
Three issues prevent the DAT market from taking off. First, retail prices for the devices range between $4,000 and $6,000. Therefore, they are likely to be used only on computer systems priced from $75,000 to $500,000, a segment that makes up only 15% of the $101.8-billion computer industry. Second, no operating standard has been set for devices of different manufacturers, making many of them incompatible. And, third, users of today’s quarter-inch cartridge drives will have to be persuaded that it is worth their time and expense to convert to DAT technology.
The two advantages of DAT are the tremendous increase in storage capacity that they offer and their small size. DAT stores information at an angle, thus allowing computers to store 1.3 gigabytes of data--the equivalent of 361,000 typewritten pages--on a tape cartridge smaller than a credit card. This angle-type storage, called helical scan, is already used in some of today’s recording devices, such as VHS players and 8-millimeter camcorders. Standard eighth-inch cassettes and other tape devices record and store information parallel on the tape. Average storage capacity of these devices is about half that of DAT.
Although introduced three years ago, DAT products have just recently begun to ship in the United States. The holdup was a recently settled lawsuit filed by the Recording Industry Assn. of America. It felt that it was already losing millions of dollars to unauthorized recording of record albums and compact discs, and it did not want to see additional losses with DAT.
‘Cashless’ Society Nearer in Europe
The adoption of smart cards for consumer and financial transactions is moving Europeans closer to the “cashless” society.
Pioneered in France in the mid-1970s, smart cards have been slow to catch on in the United States but are quickly making inroads in Europe. By the end of the decade, every man, woman and child in Europe will be using a smart card to pay for everything from food from vending machines to medical care. Last year, 45 million smart cards were issued in Europe. That number is expected to grow to 199 million by 1994.
Smart cards contain semiconductors and have a central processor unit (the “brain” of a computer). They range in size from a credit card to a slim, hand-held calculator. Unlike the more than 1.6 million magnetic-stripe credit and bank cards used worldwide, smart cards can perform complex accounting and data processing functions without being connected to a main computer.
Smart cards can be used in calculating and handling tolls, movie admissions, parking charges and home shopping. They can interact with security systems, track inventory and assist in voting and betting. In the broadest sense, smart cards can and will be used wherever people find a need for portable, convenient storage and processing of personal information.
Over the next five years, the bulk of the European smart card market will involve pay telephones, mobile telephones, banking and credit cards and pay TV. In fact, 16 million pay-TV cards will be issued in 1994.
Replacement of the magnetic-stripe credit or bank card is one of the greatest opportunities for the smart card because magnetic-stripe cards are easily copied and therefore susceptible to fraud. Nonetheless, European banks and credit companies have not adopted smart cards. For their purposes, they find better value in conventional cards.
The cost of buying a smart card reader holds some merchants back from the technology. And there is the added problem of patent liability. Currently, about 450 patents cover smart card technology in Europe. Groupe Bull of France, historically the leading innovator in smart cards, holds about half. The others are owned by many different firms and individuals.
