POWER PLAYER : CHATSWORTH-BASED FIRM SETS PACE IN DATA STORAGE WITH CD RECORDER THAT BREAKS $1,000 PRICE TAG.

Byline: Yardena Arar Daily News Staff Writer

So you wanna be a multimedia star? Perry and Marie Solomon can't guarantee fame and fortune, but they can sell the hardware you'll need to get started - at a price that won't break the bank.

The Solomons' newly renamed company, Chatsworth-based Smart and Friendly Inc., has been earning rave reviews for its CD-recorder (CD-R) drives, which allow you to create - ``burn'' in industry jargon - your own CD-ROM masters from data on your hard drive.

``When I was growing up, every kid wanted to be a rock 'n' roll star and have a recording studio in his garage,'' said President and Chief Executive Perry Solomon.

``Now every kid wants to author the next million-selling CD-ROM. . . . and now everyone can be their own publisher of a hot multimedia CD-ROM.''

Smart and Friendly CD-R drives retail for as little as $899. That's more than three times the cost of a CD-ROM drive, which can only read data (a CD-R can both read and write), but a lot cheaper than the $10,000 price tag for a CD-R three years ago.

``Two years ago, we were breaking $5,000 and a year ago it was big news when we reached a price point close to $1,000,'' Solomon said.

``The value to the ultimate end user keeps going up, the performance increases, and the price goes down. If cars were the same, you could buy a Lamborghini for $2,000.''

Smart and Friendly isn't the only player in the CD-R game - competitors include such giants as Hewlett-Packard and Sony - but lately Smart and Friendly has amassed an impressive collection of kudos, including two Editors' Choice awards from PC Magazine, a Best Buy from PC World, a four-mice rating from Mac User and a Most Compelling Buy from Multimedia World.

The White House has even stepped into the act: Last month, the company under its previous name - High Technology Distributing Inc. - was named recipient of the President's E award for excellence in exporting, an honor accorded by the Department of Commerce to about 35 companies a year. Exports accounted for 30 percent of Smart and Friendly's business in 1995, and are expected to rise to as high as 40 percent this year.

``Our sales right now are running double last year's rate,'' Solomon said.

Solomon, who previously worked as a manufacturer's representative for professional audio products, founded High Technology Distributing in 1982. At first the company distributed computer supplies and accessories such as print wheels, printer ribbons and cables, all packaged under the Smart and Friendly label because Solomon didn't believe in selling generic products.

``We even had Smart and Friendly floppy disks,'' he said. ``I felt the resellers and end users were more comfortable with something in a branded box that had top-level support. We found that to be very true.''

About the time Solomon was starting High Technology Distributing, Marie was emigrating from Taiwan with her two daughters from a previous marriage. About nine years ago, she and Solomon met through a dating service, and early in the relationship, knowing she had business experience, he asked her if she could help him out temporarily.

``I said I'll come help out for 30 days,'' Marie Solomon recalled. She never left the company - she now holds the titles of executive vice president and chief financial officer - and seven years ago Marie and Perry cemented their partnership with a wedding held in the company warehouse (which was then in Van Nuys).

By the end of the 1980s, High Technology Distributing had acquired a national reputation as a technical distributor of products such as CD-ROM, CD-R and other optical drives. A few years ago, the Solomons decided to make a major investment in developing a line of CD-Rs with partners in Japan.

``We bet the farm, and it turned out to be the right thing to do,'' Solomon said.

Ray Freeman of Freeman Associates, a Santa Barbara data storage market analyst, said the outlook is rosy for CD-R technology.

``It's the hot new territory within optical drives,'' Freeman said. ``CD-ROM is the big seller, but CD-R is the fastest growing.''

Freeman's research showed that 172,000 CD-R drives were shipped in 1995. ``We see that number nearly doubling to 338,000 in 1996, and continuing to grow for several years.''

The average price for CD-R drives was $933 for last year, and is projected to drop to $660 by the end of this year and $500 in 1997.

``There's a lot of pressure to get the user price down to $500,'' Freeman noted.

CD-R has several advantages over other data storage media on the market. With a capacity of 650 megabytes of data at a cost of about $7 a disk, it's the cheapest way of storing digitized information for random access by a computer or audio-CD player. It's sturdier than tape - ``You can pin it to your refrigerator with a magnet and it's not going anywhere,'' Solomon said - and with at least 50 million CD-ROM drives already installed worldwide, it's a universally accepted standard.

There are disadvantages. Burning a CD on a CD-R is a relatively time-consuming process - it takes about half an hour to fill an entire disk using Smart and Friendly's low-end model - so if you're looking to manufacture CDs in quantity you're better off dealing with a commercial replication house, unless you're willing to fork over $12,500 for Smart and Friendly's spanking-new 20X CD-R Deck, which can create five copies of the same disk in 17 minutes.

CDs are not rewritable, which makes them less attractive as a medium for backing up your data every week than, say, an Iomega Zip drive diskette, which can be used over and over again.

But for developers working on prototypes and for businesses that want to distribute data to a relatively small number of users in a timely manner, CD-R is unbeatable.

``You don't need to send it away and pay a pressing-master charge,'' Freeman said. ``You can create it yourself and send it out the door that night.''

John Malo, a software engineer at the San Diego office of XSoft Xerox - the Palo Alto-based document management arm of Xerox, said he's used Smart and Friendly's CD-R drive to make copies of XSoft's new Astoria software, which is used in organizing and managing components of multimedia documents.

``Before we used CD-R, we used to do it on tape,'' Malo said. ``This medium is more reliable, and more flexible.''

Because Astoria is still a new product, creating mass quantities of CDs at a replication house would not be cost-effective, Malo said.

He's also used CD-R to make copies of pre-release software quickly for shipment to testers, to create an in-house archive of the development process, and to record the installation data at the client's site for use in trouble-shooting later on.

In anticipation of the CD-R boom, Smart and Friendly has been expanding. The company's 22,000-square-foot facility is three times the size of the Van Nuys offices it left seven months ago. Smart and Friendly now has 25 employees.

While up to now Smart and Friendly has been distributed primarily through mail-order houses and catalogs, the company is preparing to announce a deal with a major distributor that should put its products into retail outlets across the country.

The Solomons aren't too worried about the competition.

``H-P is probably our prime competitor,'' Solomon said, referring to Hewlett-Packard's announcement of a competitively priced CD-R.

``We have a tremendous amount of respect for them, but we're not saddled with their bureaucracy. As soon as H-P made their announcement, our sales doubled.''

Digital storage media at a glance HARD DISK: Cost/capacity: About $300 for one gigabyte. Pros: Principal on-line data storage medium. Fast access. Cons: Not portable, expensive.

FLOPPY DISK: Cost/capacity: As little as 20 cents for 1.44 megabytes when bought in bulk with rebate offers. Pros: Ideal for loading and backing up small amounts of data. Cheap and portable. Cons: Limited capacity.

TAPE CARTRIDGE: Cost/capacity: $10-20 for 60-250 megabytes, depending on tape drive. Pros: Can be used for loading software or for archiving information. Cons: Relatively slow; not as reliable as CDs.

CD: Cost/capacity: $7 when bought in bulk, 650 MB capacity per disk. Pros: Cheap, sturdy and portable. Ideal for storing and distributing large amounts of data. Cons: Access is relatively slow. Can't be rewritten.

REWRITABLE OPTICAL DRIVE: Cost/capacity: From $20 for 100 megabytes to more than $100 for high-speed, 1 gigabyte diskettes. Pros: Typically used for regular backups. Large capacity, access almost as fast as hard drive. Rewritable, portable. Cons: Expensive.

SOURCE: Daily News

CAPTION(S):

Photo, Box

Photo: (Color) Marie and Perry Solomon, owners of Smar t and Friendly Inc., received a presidential award for their success.

Box: Digital storage media at a glance (See text)