Toshiba says it will begin marketing two revolutionary high-capacity hard drives that use perpendicular recording technology. The hard disk drives (HDDs), in the 1.8-inch format used by many digital music players, will come in a 40 GB version, the MK4007G, as well as an 80 GB model, the MK8007GAH. Toshiba says it will start production of the two next year: April for the 40 GB HDD and July for the 80 GB model.
Perpendicular recording places bits of data end-to-end, instead of using the traditional method of storing them flat on the disk surface. Since the bits essentially stand upright, they take up less space, allowing greater storage 
capabilities. Toshiba says the technology results in recording density that is 37 percent greater than that offered by current drives.
Big-Ticket Client
Apple (Nasdaq: AAPL) 
is one of the company's big customers, as Toshiba supplies the hard drives used in Apple's iPods. The newest iPods, unveiled earlier this year, incorporate the ability to store and view photos.
Dwain Smith, research analyst for Current Analysis, calls the new HDDs "an interesting development that could certainly lead to smaller iPods" -- or it could even go into laptops, he said.
"Although Apple has denied it, there could be something stirring there with regards to video," said Smith. "An 80 GB drive would certainly suit that need. Digital music has gained a lot of traction this year, and video sounds as though it will be the next big wave. The holdup that I, and a lot of others, have is the small screen size. Cost is another issue."
Toshiba hasn't announced prices for the new drives yet, but the company did say a sample 40 GB drive is priced at $1,145.
Flash Memory Hearty Format
Toshiba also recently announced plans to begin selling flash memory to Apple early next year, leading to industry speculation that Apple will introduce a flash memory iPod at January's MacWorld Expo trade show. It would be Apple's first foray into the flash music player field, which is characterized by lower prices and less storage capacity.
Apple currently leads the market in hard drive music players, and iPod accounts for 23 percent of Apple's sales. A recent report from Merrill Lynch analyst Steve Milunovich claims the market for flash memory players is five times as large as the hard disk music player market in terms of units and twice as large in revenues.
"Flash memory is a completely different beast," says Smith. "It has no moving parts, so it's not as easily damaged as hard drives. We're even starting to see cell phones with micro drives now, as device makers continue to add additional functionality."
And that could be an additional issue to consider, he warns, since "people tend to drop cell phones" -- and presumably similarly sized music players -- quite often.
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