Available later this year, the device called DAVE (for digital audio video experience) comes in two capacities -- 10GB and 20GB -- weighs 2.5 ounces and is roughly the size of a thick credit card. Previously code-named "Cricket," the drive has a rechargeable lithium ion battery that powers the device for up to 10 hours of active use and up to 14 days in standby mode. Seagate unveiled the device at this week's DEMO 07 conference in Palm Desert, Calif.

Seagate said it is targeting DAVE at telecom service providers and cell phone manufacturers. Seagate expects the portable drive to hit consumer markets by summer at prices under $200. The company is releasing a software developer kit in March to foster third-party interoperability.

"Mobile carriers can use this technology for creating value from their investments in high-bandwidth networks," said Seagate's Patrick King in a statement. "Mobile handset manufacturers have another tool for turning the multimedia phone into the center of the mobile consumer's digital life." King is senior vice president and general manager of Seagate's consumer electronics business unit.

Portable storage for cell phones is considered a growth opportunity. The number of mobile video download subscribers is expected to jump to nearly five million in 2010 as compared to roughly 250,000 mobile video download subscribers in 2006, or so say surveys from analyst firm Frost & Sullivan.

Seagate said a DAVE drive can turn a mobile phone into a powerful DVR/MP3 device, giving users the ability to download a range of applications from mobile phone network video and online music to audio books and GPS data. The 10GB version can hold 2,500 songs or 21 hours of video, Seagate said.