The recording performance of a prototype magnetic tape based on perpendicularly oriented barium ferrite particles is investigated using an enhanced field tape write head and a 90 nm wide giant-magnetoresistive reader. A linear density of 680 kbits/in with a postdetection byte-error rate (BER) <3.2e-2 is demonstrated based on recorded data processed by a software read channel with noise-predictive maximum likelihood detection. With this detector error rate, a user BER of <1e-20 can be achieved by means of product error correction coding and iterative decoding. Several advances in the area of track-following servo control are also presented. Specifically, we describe a new timing-based servo pattern, which in combination with an optimized servo channel enables the generation of position estimates with nanoscale resolution and a high update rate. Track-following experiments are performed using an experimental low-noise tape transport, a prototype high-bandwidth actuator, and a set of speed-optimized H-infinity-based track-following controllers. Combining these technologies, we demonstrate a position-error signal (PES) with a standard deviation of 5.9 nm or less over a tape speed range of 1.23-4.08 m/s. This magnitude of PES in combination with a 90 nm wide reader allows operation with 140 nm wide tracks. Combined with a linear density of 680 kbits/in, this leads to an equivalent areal density of 123 Gbits/in2.