A Samsung representative said Wednesday that the 0.85-inch drive is "in the R&D stage," and did not offer details about when a final product might be available.
Toshiba and GS Magicstor already have announced efforts to build drives of that size, which likely will be candidates to handle storage duties in cell phones with advanced functions. The massive cell phone market is seen as a potential new arena for hard drives. But it's not clear that 0.85-inch drives will be competitive against flash memory, a rival storage technology that is based on semiconductors.
Dave Reinsel, analyst with research company IDC, said cell phones of the future that store music and other sorts of data are likely to require 4 gigabytes of capacity, an amount that can be squeezed into a 0.85-inch drive. A tiny drive could store 4GB of data more cheaply than flash memory, he said, but flash is starting to encroach on the territory. "Flash is doing an amazing job of getting its price down," he said.
Samsung and Toshiba are rather unusual players in the hard drive market because they also make flash memory. Samsung pays Toshiba royalties for NAND, a type of flash.
It wasn't immediately clear if the small Samsung drive under development will use licensed technology from another company.
To date, Samsung sells hard drives for use in desktop machines and laptop computers. It's projected to ship 5.5 million drives this quarter, out of 75 million drives shipped in total, according to IDC.
After focusing for years on products for personal computers and the larger computers that run in data centers, drive makers are now targeting consumer devices as well. Many of the drives for consumer products have disks smaller than the 3.5-inch diameter platters typically found in desktop PC drives. Apple Computer's iPod, for example, uses a 1.8-inch drive from Toshiba. Its iPod Mini employs a 1-inch drive from Hitachi Global Storage Technologies.
Phones could prove to be the biggest consumer market yet. IDC estimates that nearly 586 million mobile phones will ship this year worldwide, rising to roughly 794 million shipped in 2008.
Samsung has introduced a phone with a built-in drive. But for small drives to make a big dent in the mobile phone market, they must overcome a number of hurdles, industry observers say. These include the ability to handle wear and tear, a smaller appetite for battery power, and a low price tag.
IDC has a conservative view of how well drives will spin their way into cell phones. About 500,000 mobile phones equipped with a built-in drive will ship in 2005, and the number will rise to 5.2 million in 2008, according to IDC.
Reinsel said manufacturers are likely to have to sell drives for roughly $30 each in order for phones using them to be cheap enough for mass adoption. But he said that's a difficult price point for drive makers.
"It's going to be very hard to make money at $30 a drive," he said.
CNET News.com's John Spooner contributed to this report.