Santa Clara Calif. Disk drive makers reportedly are in the final phase of their historic shift to perpendicular recording. Vendors at an annual industry gathering here last week said the vertical technology will deliver higher-capacity products that will nab a growing share of design wins in consumer systems, opening a door to revenue growth and sustained profits they did not find in the PC.
But rival flash memory is stepping up the pace of competition. Apple Computer Inc.'s decision earlier this month to replace its mainstream iPod Mini, based on 1-inch drives, with the iPod Nano, using 2 to 4 Gbytes of aggressively priced flash, cast a shadow over Diskcon 2005.
Drives have greater capacity, lower cost per gigabyte and faster data transfer rates than flash. But memory chips are smaller, lower in power and more rugged than drives. Both drives and flash keep upping capacities and lowering prices, shifting the line where the technologies overlap.
In the wake of the iPod Nano, drive makers fear that in many mainstream consumer markets the capacity available for $30 worth of flash chips may be more attractive than the added storage for the cheapest, $50 hard drives. Indeed, Michael Maia, vice president of sales and marketing for PortalPlayer Inc., whose chips power the majority of MP3 players, told the conference his company's next-generation products will support both flash and hard drives for the first time.
"Things are very different than they were just a year ago. We underestimated 2- and 4-Gbyte flash," Maia said. PortalPlayer (San Jose, Calif.) will not support the 0.85-inch drives launched by Toshiba Corp. because they lack the capacity to compete with flash, he added.
"We can't get too caught up in the iPod Nano," said John Donovan, vice president of market watcher Trend Focus (Los Olivos, Calif.). Apple is expected to roll out disk-based, video-ready iPods next year, and as many as 200 other consumer gadgets, such as video cameras, are prime targets for small drives, he said.
"The cell phone will determine where the 1-inch drive goes," Donovan added, pointing to the mega consumer market many drive makers see as their holy grail.
But here, too, drives face grave challenges. "The specs of the hard drive need to evolve to become useful for mobile terminals," said Marko Ahvenainen, the senior research engineer responsible for qualifying hard drives at Nokia Corp.
In a Diskcon presentation, Ahvenainen said that if drives are to be designed into cell phones, they need to operate at both colder and hotter temperatures, reduce magnetic emissions and audible noise, and become more resistant to internal and external vibrations. Drive capacity and size are also key. "The line for using flash rather than hard drives is now at 4 Gbytes, but it may move next year to 8 Gbytes," said the Nokia engineer. "And size is really important to us."
Hitachi Global Storage Technologies' slim, 1-inch "Mikey" form factor "is something we would consider for some products, but it's still on the edge," Ahvenainen said. "We can't even fit a 0.85-inch drive, in most cases."
Ken Morse, vice president for client architecture at Scientific-Atlanta Inc., painted a brighter picture of drive opportunities in home networks. The company now ships about 500,000 drives per quarter for set-top boxes and cable headends, up from zero three years ago. Growing video-on-demand libraries at cable headends and the shift to high-definition set-tops and digital video recorders will drive growth in drive shipments, he said.
In other consumer markets, JVC Corp. and Sony Corp. plan to use both 1- and 1.8-inch drives in digital video cameras. Toshiba said it shipped more than 6 million drives last year into the automotive market, a sector it dominates.
Indeed, many observers see better days ahead for drive makers, thanks in part to emerging consumer video applications.