PHILIPS consumer electronics' key modules group and IBM storage systems' division have announced a joint agreement to develop advanced performance 3.5-inch and smaller optical disc drives. The first result of this venture will be the IBM model MTA-3127 3.5-inch Magneto-Optical Drive for the original equipment manufacturers (OEM) market. The alliance unites Philips, the company that invented compact disc technology, with IBM, which introduced the first commercial disk Drive. ''This agreement will allow each of us to capitalise on our complementary strengths,'' said Ray Abuzayyad, IBM vice-president and chief operating officer, IBM storage systems division. ''The advantages of this alliance will be seen in the delivery of low cost, high-quality disk drives.'' The emerging 3.5-inch optical disk drive market was a logical focus for a joint effort between the two companies, Mr Abuzayyad said.