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Faulty hard drives spark reseller furore

Faulty hard drives spark reseller furore

A class action suit being lodged in the US against Fujitsu over faulty hard drives may be replicated in Australia, according to frustrated resellers who contacted ARN last week.

Four US law firms have initiated a class action suit against Fujitsu over its MPG3 series of hard drives, which have been found to have abnormal failure rates. The action, which is currently pending in California, seeks to obtain damages, restitution and injunctive relief from Fujitsu and several of its partners for misrepresenting the safety and reliability of the MPG3 drives.

Last month, Fujitsu in Japan said it would replace drives that had faults in the controller LSI (large scale integration) chips. A Fujitsu spokesperson told the IDG News Service in Japan that between 200,000 and 300,000 of the 10 million hard disk drives (about 2 or 3 per cent) manufactured between September 2000 and September 2001 could be affected.

After that announcement, systems builders in the UK swamped a local IT news site, The Register, with stories of far greater failure rates in the Fujitsu drives -- up to 30 and 50 per cent. At the same time, ARN was approached by several local systems builders complaining of similar failure rates in Fujitsu products over the specified period.

It is not uncommon for a small percentage of hard drives to fail, and judging by the letters ARN has received, no one hard drive vendor is any less guilty of pumping out unreliable products. But in most cases, when one particular model has been shown to be highly prone to failure, some sort of recall is expected.

While there was a "recall" as such in Japan, there has been no such action in Australia. Resellers and systems integrators that use Fujitsu drives are furious about the losses they have incurred during the period over which the drives were consistently failing, so much so that a group is now considering a class action suit against the vendor.

One such frustrated reseller is Terry O'Brien of Maintain Axis Computers in New South Wales. The systems integrator used the hard drives for part of the 12 months Fujitsu admitted to abnormal failure rates in its drives, but said the drives failed at an extraordinarily high rate. "They also continue to fail on an ongoing basis, and the warranty replacements from Fujitsu Australia have been equally unreliable," he said.

The hard drive failures cost his business a great deal, not only due to unprecedented levels of warranty support work, but also in lost credibility among customers. O'Brien said he could name several high-profile accounts that simply will not deal with the integrator any longer, as they are naturally under the assumption that the fault lies with the reseller's computers in general, rather than a specific fault in a manufacturer's product.

O'Brien repeatedly reported extremely high failure rates in Fujitsu drives to the manufacturer. The only time he received a reply was when one of the vendor's channel sales managers e-mailed him to deny that the product had ever been recalled anywhere in the world. This particular Fujitsu employee refused to answer ARN's questions on the issue.

O'Brien is not satisfied with merely having the drives replaced with more Fujitsu drives. The replacement models have failed on just as many occasions.

O'Brien is not alone. "Our first 18 months with Fujitsu was wonderful until they introduced their MPG models, which have been absolutely horrific," said Jennifer Healy, director of Townsville Computer and Design Services. "Fujitsu were honouring their warranties by offering replacements. We were replacing our customers' Fujitsu drives with Fujitsu drives, but then we had clients who were experiencing a second drive failure. So we're no longer accepting Fujitsu replacement drives."

Healy said Fujitsu is now offering its master distributors -- Tech Pacific, TodayTech and Alepine -- refunds on the MPG drives, but not all distributors are passing this on to resellers. To the best of Healy's knowledge, Tech Pacific is offering a full refund on Fujitsu drives, Alepine will not credit resellers but offer a choice of either Western Digital, Maxtor or Seagate drives as a replacement, while TodayTech will only replace the Fujitsu drives with Western Digital drives.

Alepine refused to discuss the issue with ARN, while TodayTech was unable to respond before press time. A sales representative at Tech Pacific confirmed that the Fujitsu drives had been problematic, and that the distributor was offering the option of either a replacement or a credit for the specific faulty model. He said that the vendor had been very rigid with its returns processes, placing additional strain on distributors. The problems are of such a magnitude that a third party has been hired to cope with the volume of returns.

Fujistu was unable to provide official comment on the issue, but a spokesperson said the problems with the manufacturer's drives were "old news" and that these problems have been resolved through the returns process.

Most resellers contacted by ARN about the hard drive issue said they would be happy to pay more for hard drives that were reliable, rather than endure the poor-quality product that all vendors are guilty of putting on the market.

"Manufacturers don't drop their warranties if they have faith in their products," Healy said. "Generally the problems are stemming from manufacturers making hard drives that are too fast and too cheap.

"I don't give a fat rat's clacker what they cost. I just want a drive that works."

For more analysis of the hard drive industry, see this week's issue of ARN.


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