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NStor May Go Solo: Page 2 of 3

What's more, nStor Corp.'s revenues have drooped a bit. While they rose nearly 73 percent in the third quarter 2003, they dipped 22 percent to $2.18 million in the latest quarter. Chairman Levy blames the SATA market: While he thinks it will be a "huge" market eventually, he says some customers are confused about how best to apply the technology, and they've stalled on purchasing gear.

Despite a slow ramp-up, a range of companies have taken an interest in SATA, including IBM Corp. (NYSE: IBM), LSI Logic Corp. (NYSE: LSI), and Maxtor Corp. (NYSE: MXO). (See SATA Suppliers Ready for Onslaught.)

Component makers are biting, too. Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC) is developing its own angle and recently bought SATA controller maker 3ware Inc. (see AMCC Buys More Storage).

Would anyone be interested in buying nStor Corp. for similar reasons? Would the company be better off splitting from its parent and taking its own road ahead? There are no answers yet, and the slow takeoff of SATA and the increasingly competitive market make the outcome a guessing game. For now, nStor appears to be exploring its options.

Mary Jander, Site Editor, Byte and Switch