IT'S A WHOLE NEW GAME: THE HARDS VS. THE CARDS
Back in 1987, Steven B. Volk saw the future, and it was small. Computers were shrinking to laptop size and soon would grow even smaller. So, too, would the components that go into them. As marketing vice-president for PrairieTek Peripherals Inc. in Boulder, Colo., which was developing the world's smallest hard-disk drives, Volk thought he was sitting pretty.
Sure enough, hard-disk drives using 2 1/2-inch diameter platters rather than 3 1/2-inch ones have become standard equipment on millions of laptop and notebook computers. But PrairieTek didn't live to enjoy the boom. Outgunned by Conner Peripherals Inc., of San Jose, Calif., the company went under in 1991.
But Volk hasn't given up. He's now president of Integral Peripherals Inc., the first company to ship a hard-disk drive that stores data on 1.8-inch diameter platters. The whole thing is about the size of a stack of credit cards a half-inch high. That's 50% smaller than the smallest 2 1/2-inch drives. And because the 1.8-inch platters are lighter, ittakes less electricity to keep them spinning--a key advantage in battery-powered computing.
CRASH TEST. Triumph at last? Perhaps. But this time, Volk faces not only the biggest names in the disk-drive business, including IBM, but also mighty chipmaker Intel Corp. Intel is pushing a four-year-old chip technology that it says will eventually make tiny disk drives obsolete.
It's called flash memory, and Intel says it can do almost everything a hard disk does--such as storing all the programs and data you keep on your PC--but without moving parts. And a videotape produced by Intel dramatically demonstrates why that's important. In it, engineers strap a memory card onto one electric paint shaker and a disk drive onto another. Each storage device is linked to a personal computer, running identical graphics programs. Then the engineers switch on the paint shakers. Immediately, the disk drive fails, its delicate recording heads smashed against its spinning metal platters. The flash-memory card takes the licking and keeps on computing.
If computer makers used the paint-shaker test to figure out what storage technology to use in new notebook and palmtop computers, Volk and the other disk-drive makers could call it a day. But it isn't that simple. While flash memory clearly is sturdier than any disk drive--and consumes 95% less power--it has drawbacks, too (table): in particular, high price and limitations in capacity.
Intel's latest flash-memory card, which is about the size of a stack of four credit cards, can store only 20 megabytes of information and costs $612--about twice as much as 1.8-inch drives that store three times the amount of data. San Jose startup Ministor Peripherals Corp. has introduced, but hasn't yet shipped, a 64-megabyte, 1.8-inch drive. And Japan's NEC Corp., in conjunction with Aura Associates Inc. of Saratoga, Calif., has announced an 85-megabyte model. Such capacities already are standard on desktop machines and soon will be expected in portables, too, as computer owners switch to more complex software like Windows and OS/2.
HEDGED BETS. Intel, which had 86% of the $130 million flash-memory market in 1991, says the price and capacity gap will narrow. Just four years ago, flash cards cost 20 times as much as hard disks in terms of price per megabyte of capacity, says Richard D. Pashley, general manager of Intel's memory-components division. He predicts that by 1996, a 40-megabyte flash card will cost less than a 40-megabyte hard disk. And Intel is likely to drop its flash-memory prices faster once competitors, such as SunDisk Corp. and Advanced Micro Devices Inc., ramp up production on competing flash memory devices.
Disk-drive makers say their engineers
aren't standing still, either. Integral's Volk says capacities will increase as quickly as they have for earlier generations of hard disks. That implies that within two years, 1.8-inch drives will hold more than 100 megabytes.
Makers of flash-memory cards and tiny disk drives do agree on one thing: Their businesses are taking off more slowly than they'd like because computer makers are using these technologies only for niche products, such as Hewlett-Packard Co.'s hand-held HP 95LX. IBM says it will use SunDisk's flash cards in a forthcoming pen-based PC, and Sanyo Electric Co. is using a 1.8-inch Integral drive in a "pentop" computer it's testing for the Japanese market.
FLASHBOTS. Ministor Chief Executive Alex Malaccorto says he's traveling the world trying to convince PC makers that his company's drives are just what they need for their mass-market notebooks and palmtops. "Customers are confirming to us that we are on the right track," says Malaccorto. But many computer makers are wary of doing business with any disk-drive startup, he concedes. They still remember how PrairieTek fell behind in producing the 40-megabyte, 2 1/2-inch hard drives they needed to fill demand for laptop computers a year or two back. PC makers also have been slow to adopt flash memory, in part because they have had to write cumbersome special programs to make the card "look" like a disk drive to the PC's software.
For now, flash memory and "subminiature" disks are doing best outside computers. Intel sells flash memory for use in modems and industrial robots. And one of Integral's best customers is Diagnostic Medical Instruments Inc., a Syracuse (N.Y.) maker of medical equipment that uses the hard drive in a portable heart-monitoring device. Only 332,000 of the 37.4 million hard-disk drives sold for use in computers this year will be 1.8-inch units, says market researcher Dataquest Inc. But next year, sales should accelerate when Conner, Seagate Technology, and IBM are expected to jump in. IBM Japan Ltd. has been showing a 1.8-inch drive to other computer makers for several months.
The entry of the disk industry's big guns will push shipments to 5.6 million units, worth $800 million, in two years, estimates J. Philip Devin, vice-president of storage technologies at Dataquest. That has Integral's Volk scrambling to get some orders before Conner et al. hit town. "We've got to get big fast," he says. To do it, he will have to persuade some computer makers to think small.THE BATTLE OF THE MIGHTY MITES
ADVANTAGES Use well-known hard-disk-drive technology. The most advanced
products store 85 megabytes--enough storage for 42,500 pages of text. Price is
$10 to $15 per megabyte
DISADVANTAGES Rely on moving parts that can malfunction and crash easily when a
computer is jostled. Require more space and power than memory cards
ADVANTAGES Variation of conventional computer-memory chips, with no moving
parts to break. Also, can 'read' data faster
DISADVANTAGES Circuits on memory chips wear out after repeated use, limiting
the lifespan of memory cards. Highest capacity is 20 megabytes, although
40-megabyte drives are expected soon. Higher price--$30 to $50 per megabyte
DATA: BW, COMPANY REPORTS
Paul M. Eng in New York and Robert D. Hof in Santa Clara, with Hiromi Uchida in Tokyo