IBM Corp.San JoseMicrodrive

IBM's Microdrive, a data-storage device about the size of a matchbook, came to market this year. Retailing for about $500, the 340-MB capacity Microdrive has about three times the capacity of typical flash-memory cards selling for $300. Storage-hungry applications for the Microdrive include digital cameras, handheld devices, and notebook and laptop computers. "There is a definite need for portable, high-capacity data storage at an economical dollar-per-megabyte price," says David McIntyre, director of strategic marketing for the Microdrive. Several major consumer electronics manufacturers have agreed to support Microdrive, including Compaq, Casio, Diamond Multimedia, Eastman Kodak, Minolta, Nikon, and Samsung. The digital-camera market is especially attractive to IBM, says McIntyre, because the Microdrive is capable of storing up to 1,000 digital photos compressed. The device basically obviates the need for any reloading of film or flash memory cards. Lack of memory has been a problem for handheld devices such as the PalmPilot, McIntyre adds. Many of these units come with two to eight megabytes of storage, far less than Microdrive's 340-MB capacity. "You are now able to run applications and store data on very large databases," he says. Music and video are other largely untapped markets for such a device. For instance, a single Microdrive can store up to six hours of CD-quality music. And because the Microdrive is removable, it can be plugged into a variety of devices. Yet another potential market for the miniature drive is embedded systems. The Microdrive could be used to store field data, graphics, or maps that can be accessed in a variety of handheld units, including bar-code readers and global-positioning-system devices. John Teresko, John Sheridan, Tim Stevens, Doug Bartholomew, Patricia Panchak, Tonya Vinas, Samuel Greengard, Kristin Ohlson, and Barbara Schmitz contributed to this article.