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Correspondence

October 21, 2005

Via EDGAR

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C.  20549

Attn:

Brad Skinner

Mark Kronforst

Stathis Kouninis

Re:

Quantum Corporation

Form 10-K for the fiscal year ended March 31, 2005

File No. 1-13449

Ladies and Gentlemen:

        Quantum Corporation (the "Company") submits this letter in response to comments from the Staff of the Securities and Exchange Commission (the "Staff") received by letter dated September 20, 2005 relating to the
Company's Form 10-K for the fiscal year ended March 31, 2005.

        In this letter, we have recited the comments from the Staff in italicized, bold type and have followed each comment with the Company's response.

10-K for the Fiscal Year Ended March 31, 2005

Critical Accounting Policies, page 17

1.

We note that you apply certain critical accounting policies that have affected your financial results due to the changes in the underlying estimates and assumptions.  For example, we note that your results have been affected in the past by changes to
estimates related to warranties, restructuring activities, and contingent tax exposures.  Please tell us how you considered disclosing how accurate your estimates have been in the past, how much the estimates have changed, and whether your estimates are
reasonably likely to change in the future.  Address how you have analyzed your estimates’ specific sensitivity to change and whether you have provided appropriate quantitative information that is reasonably available.  Refer to Section V of SEC
Release 33-8350 for further guidance

Response:

Our accounting judgments are based upon both internal and external factors, many of which are uncertain at the time that we must make the judgment.  The Company has critical accounting policies for warranties, restructuring activities, contingent tax
exposures, revenue recognition, inventory valuation, and estimates of impairment for goodwill and intangible assets.  On a quarterly basis, the Company reviews prior estimates against the current estimates and analyzes the reasons for changes including changes
in underlying assumptions.  Changes in assumptions can occur and are typically due to conditions that did not exist previously nor were anticipated and reasonable quantitative information was not available at the time of the estimate. For our critical accounting
policies, significant changes in estimates are disclosed in our 10-K.  The significant changes in estimates are discussed below.

•

Warranties include estimates related to current year units and prior years’ units under warranty.  A component of the warranty estimate is the average cost to repair that is based on both a review of historical data and anticipated future costs.
For example, as discussed on pages 16 and 21 of our 2005 10-K for the fiscal year ended March 31, 2005, the average cost to repair our products increased relative to our fiscal year ended March 31, 2004 due to the increased volatility in repair drive volume for
fiscal year 2005. The fiscal year 2005 warranties estimate therefore included a $3.1 million adjustment for warranties issued in the prior fiscal year based upon this increase.  This adjustment is also disclosed in Note 10 to the financial statements.

•

Restructuring activities are subject to SFAS no. 112 and are recorded at the date of the Company’s commitment to an exit plan.  At the time of each event, a firm plan is put in place and approved, and all circumstances and assumptions available at the
time that the commitment is made are evaluated to calculate a reasonable estimate.  On a quarterly basis, these circumstances and assumptions are reassessed and the estimate is revised as necessary to reflect any new or different information or assumptions that
have arisen since the time of the prior estimate. For example, as noted on pages 24 and 60 of our fiscal year 2005 10-K, a portion of our expected severance and benefits, and facilities costs were reversed due to conditions that did not previously exist.

•

Contingent tax accruals are reviewed on a quarterly basis and estimates are revised based upon new information that was not available at the time of the estimate.  Contingent tax accruals are estimated based upon whether it is probable that a future tax
benefit cannot be taken.  If it is not probable, then the future tax benefit is reserved as a contingent tax accrual.  Contingent tax accruals are reviewed on a quarterly basis and estimates are revised based upon new information that was not available at
the time of the prior estimates.  For example, as discussed on page 27 of our 2005 10-K,  $15.6 million of the contingent tax accrual was reversed due to the execution of a Settlement Agreement with Maxtor Corporation well as the resolution of the Internal
Revenue Service’s audit of the Company’s fiscal years ending March 31, 1997, 1998, and 1999.

•

Goodwill and intangible assets are assessed quarterly.  As discussed on page 25 of our 2005 10-K, in 2003, there were charges related to the adoption of SFAS No. 142 and also impairment charges primarily caused by the deterioration in the market values of
comparable companies and a reduction in anticipated future cash flows.  Although an analysis is done quarterly and assumptions are changed according to outside market conditions as well as company performance, the assumptions have not resulted in additional
impairment charges since fiscal 2003.

Liquidity and Capital Resources, page 29

2.

We note that you do not appear to provide explanations of the underlying reasons for changes in your operating assets and liabilities that significantly affect your operating cash flows each period.  Explaining the reasons for significant changes in
balance sheet items such as your accounts receivable and other assets and liabilities would assist readers in assessing the quality of your cash flows.  Please explain to us how you have complied with Section IV.B.1 of SEC Release 33-8350.

Response:

With respect to the fiscal year ended March 31, 2005, the increase in accounts receivable from our fiscal year ended March 31, 2004 was primarily due to the additional accounts receivable associated with the Certance acquisition, partially offset by lower revenue
from Quantum products. On page 20 of our 10-K, we discussed the decrease in our revenue levels from the prior fiscal year.  Income taxes payable was lower compared to the prior fiscal year primarily due to release of a contingent tax accrual related to the
execution of a Settlement Agreement with Maxtor Corporation on December 23, 2004 as well as the resolution of the Internal Revenue Service’s audit of our fiscal years ending March 31, 1997, 1998, and 1999.  We have disclosed the material terms of the
release of contingent tax accrual on page 27 of our 10-K for the fiscal year ended March 31, 2005.  The decrease in accrued warranty primarily reflected a decrease in the installed base; the decrease in the installed base is mentioned on page 20.  Cash used
in paying down other liabilities reflected the impact of lower levels of operating expenses, which in turn result in lower liabilities associated with these balances.  On pages 22 – 23, we discussed the decrease in our operating expense levels from the
prior fiscal year.

We believe that our disclosures comply with Section IV.B.1 of SEC Release 33-8350 since readers are able to infer the relationship between various factors affecting our balance sheet accounts and levels of revenue and expenses in our 10-K.  However, in future
filings, we will enhance our disclosure with explanations of the underlying reasons for changes in our operating assets and liabilities that significantly affect our operating cash flows each period.

Revenue recognition, page 50

3.

Please explain to us the extent to which software is provided with, or embedded in, your products. Indicate whether you have recognized any portion of your revenue in accordance with SOP 97-2 and explain to us how you considered paragraph 2 of the SOP as it
applies to any of your product offerings that include software.

Response:

Paragraph 2 of SOP 97-2 states that “this SOP provides guidance on when revenue should be recognized and in what amounts for licensing, selling, leasing, or otherwise marketing computer software. fn 1 It should be applied to those activities by
all entities that earn such revenue. It does not apply, however, to revenue earned on products or services containing software that is incidental fn 2 to the products or services as a whole.

Footnote 2 of SOP 97-2 Software Revenue Recognition states that “Indicators of whether software is incidental to a product as a whole include (but are not limited to) (a) whether the software is a significant focus of the marketing effort or is sold
separately, (b) whether the vendor is providing post-contract customer support, and (c) whether the vendor incurs significant costs that are within the scope of FASB Statement No. 86, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed.

The following describes the nature of the software provided with, or embedded in, our products:

•

DLTSage is a suite of predictive and preventive management software tools that help customers to diagnose, plan, and manage their tape storage investments.  It monitors and reports on certain tape drive performance metrics to allow the customer to know
whether the drives are performing optimally.

•

DLTIce enables customers to configure the tapes used in the DLT drives as WORM (Write-Once, Read Many).  This software essentially facilitates the format in which information is stored on and retrieved from DLT tape cartridges.

•

The software embedded in DLTxchange enables the exchange of High Definition and Standard Definition video assets among professional video applications and systems.

•

The software provided with the DX series of products is a system firmware and provides the functionality similar to a tape library by improving backup and restoring performance and reliability.

The above software provided with, or embedded in, our products is incidental to the functionality of our product as a whole due to the following reasons:

•

Quantum sells storage devices, not software.

•

The software is not sold separately.

•

In general, customers cannot use Quantum’s software after they cease using Quantum’s storage devices.

•

There is no commitment to provide post contract support, and Quantum has historically not provided any such support for the software.

•

Quantum does not incur significant costs within the scope of FAS 86.

•

Quantum’s marketing and promotion efforts are primarily focused on the hardware enhancements or changes, not the software itself. For certain products with embedded software, Quantum’s marketing materials do not even discuss the software that is
embedded.

Therefore, we have concluded that the software is outside the scope of SOP 97-2.  Quantum quarterly reassesses relevant facts and circumstances to determine whether a change in the accounting literature followed is warranted.

4.

Please tell us more about your revenue recognition policy related to royalties.  Describe the material terms of your royalty arrangements and explain how you meet the applicable criteria in order to recognize this revenue.  Refer to the
authoritative literature that support your revenue recognition and explain how you comply with that literature.

Response:

We recognize revenue from royalties when the following four criteria are met in accordance with paragraph 1 of SEC SAB 104, Revenue Recognition:

•

Persuasive evidence of an arrangement exists,

•

Delivery has occurred,

•

The seller's price to the buyer is fixed or determinable, and

•

Collectibility is reasonably assured.

Our royalty arrangements are represented by master contracts.  Under these master contracts, we have licensed certain intellectual property to third party manufacturers, allowing them to manufacture and sell certain products (e.g., DLTtape, SDLTtape and LTO
format tape cartridges) using the licensed intellectual property.  As consideration for licensing this intellectual property, our licensees pay us a per-unit royalty for sales of their products that incorporate the licensed technology.

In accordance with our royalty arrangements, our licensees provide us with unit reports that include the quantity of units sold to end users that are subject to royalties, on a periodic basis.  We recognize revenue based on the unit reports, which are
provided to us in a timely fashion.  The unit report substantiates that the delivery has occurred. We then measure our royalty revenue by multiplying the units sold per the unit reports by the royalty per unit.  In accordance with the royalty agreements,
royalty payments to us from our licensees are made on a per unit basis at a stipulated per unit amount and therefore, the price is fixed or determinable.  These reports have been accurate as evidenced by the subsequent collection of royalty payments as compared
with the unit reports.

Note 7. Special Charges, page 59

5.

Please explain to us why you began to account for severance charges in accordance with SFAS 112 in the second quarter of fiscal 2005.  Describe the changes from your previous restructuring activities and explain how those changes resulted in your
accounting for these charges in accordance with SFAS 112.

Response:

Up until Q2 FY05, Quantum recorded restructuring charges under FAS 146 guidance, as it had not established a past practice of providing similar termination benefits in connection with its various restructuring efforts.   Due to economic conditions,
Quantum reduced the termination benefits substantially over the years prior to Q2 FY05.  Throughout this period, in response to continually declining revenue, Quantum continued to revise and change the benefit formulas that it used to determine termination
benefits for its various employee groups.   Additionally, in Q1FY05, Quantum did not anticipate that any future restructurings would be required, believing that the end of Q1FY05 marked the completion of the process to adjust the Company’s cost
structure to a level appropriate in light of the Company’s anticipated reduced revenue levels.  As such, the termination benefits that Quantum provided prior to Q2 FY05 had been treated as one-time termination benefits under FAS 146.

However, during Q2 FY05, revised Quantum forecasts indicated that future restructurings were likely due to a continued decline in revenue and that future restructurings would likely involve termination benefit arrangements similar to those that were offered in the
Q1FY05 restructuring plan.  The Q2FY05 termination benefit packages were the same as the Q1 FY05 termination benefit packages, and subsequent termination benefit packages were, to the extent that future restructurings were to occur, expected to remain the same
or substantially similar in the foreseeable future. Restructuring benefits subsequent to Q2FY05 were the same except for those terminated employees in countries that had different statutory labor requirements for termination benefits.

SFAS 112 states that post-employment benefits that meet the conditions in paragraph 6 of Statement 43 shall be accounted for in accordance with that Statement. Paragraph 6 of Statement 43 states:

An employer shall accrue a liability for employees' compensation for future absences if all of the following conditions are met:

a.

The employer's obligation relating to employees' rights to receive compensation for future absences is attributable to employees' services already rendered,

b.

The obligation relates to rights that vest or accumulate,

c.

Payment of the compensation is probable, and

d.

The amount can be reasonably estimated.

Footnote 7 of FAS 146 states that absent evidence to the contrary,