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Michael Brown, Chairman and CEO, Quantum: Page 3 of 19

Michael Brown: I'm glad you asked. We've said this quarter we're going to have revenue between $200 and $215 million. Earlier we thought it was going to be $230 to $235 million. What happened was, one of our major OEMs was going to take more than one of these tape automation lines. It was new to them. They started to ramp early in the quarter, and they were too optimistic, frankly, in the environment we're seeing there today about the uptake in their channels. Our channel business was actually up, quarter to quarter. Overall, the business is what we expected it to be -- except for that one customer.

Byte and Switch: Which OEM was it?

Brown: We haven't disclosed that, but it involves two different product lines in tape libraries. The reaction from Wall Street, any time you preannounce, is terrible. But we think it's exaggerated. Nothing changed fundamentally in the business. Nothing changed in terms of product lines. It really represents one OEM and a forecast error that's being passed through the system. [Ed. note: Quantum expects to report its earnings for the quarter on July 24.]

Byte and Switch: You also warned you would miss expectations the previous quarter. That was a different issue, right? You said that the sales of media were most of the problem.

Brown: Actually, if you look back over many quarters... We had $98 million in media in the March quarter. That was an all-time high -- except for the previous quarter. So in December we had a huge spike up; it was $119 million, and the previous quarter before that was probably in the low 90s. Then it came back to what would have been a record. This was really related to the introduction of SuperDLT. This was unexpected -- what we were doing at the time was ramping up on SuperDLT media. I can't explain why we might have fluctuations in the number of cartridges that are sold one quarter versus another. Quarter to quarter you could have a revenue swing as much as a $20 million. All the pieces are hard to forecast.