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Start-up brings hard drive to the masses

A new hard drive from Cornice is small enough to fit into MP3 players or cameras but costs less than memory cards and other tiny drives.

Learn more about hard drives

Cornice wants to take the hard drive out of PCs and put it into your camera.

The Longmont, Colo.-based start-up has developed a 1.5GB, 1-inch diameter hard drive for consumer-electronics devices that the company says will be cheaper, smaller and hold more data than some other mini-hard drives or flash-memory cards.

And, while competitors are sure to challenge the company, electronics manufacturers appear to be responding favorably at a time when drives are increasingly becoming important and more prevalent in the consumer-electronics world.

Samsung will release a digital video camera containing the company's drive in the United States in August. The camera, which was shown at the Consumer Electronics Show but not described in technological detail, will cost less than $600 and is "about the size of a pack of cigarettes," Cornice CEO Kevin Magenis said.

Twelve companies so far have plans to release products with the drive. RCA/Thomson, Rio and five other manufacturers will come out with MP3 players with the Cornice Storage Element (SE), and a major U.S. retailer will feature a Cornice-based player from Korea. The first products will hit shelves this quarter, according to Cornice.

"I think it could have a big impact," said Cindy Wolf, an analyst at In-Stat/MDR. "From an audio perspective, it could kind of help spur the market. (Consumer-electronics makers) will be offering a hard-drive player at a lower price than an iPod."

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The Cornice drive is essentially a minimalist hard drive that has been shorn of any materials not needed for portable electronics. The drive, for instance, doesn't have its own internal, dedicated pool of memory; instead, it uses the memory shared by the rest of the device to cache data. The SE doesn't have rails, so it can't be removed from the host device; by contrast, the drive is planted on the motherboard, and transfers of files are accomplished through USB (universal serial bus) ports.

"Mechanically, it has about one-third of the parts of a Hitachi Microdrive," which is also a one-inch drive, Magenis said. The drive contains only three screws, compared with 12 in similar mini-drives, he said.

A reduction in components cuts costs. The 1.5-inch GB drive, which has been in volume manufacturing since mid-April, sells for $65 in quantities of 10,000. The company is aiming for $50, Magenis said. By contrast, existing standard 1-inch Microdrives from IBM sell for $219 at retail or more, while 1GB flash cards go for around $200.

The price versus density argument results in an interesting niche, said Susan Kevorkian, a consumer-electronics analyst at IDC. Currently, Flash-based memory players containing 256MB of flash sell for $175 to $200, she said. The Cornice-based devices will sell for less than $200 but come with 1.5GB of storage.

At 1.5GB, the Cornice-based devices will hold far less than other hard drive-based music players such as Apple Computer's 20GB iPod. However, they will cost less and be smaller. RCA's planned MP3 player using the micro-drive is about the size of a sports watch. The iPod and other hard drive-based players, which come with 1.8-inch or 2.5-inch drives, are much larger.

Smaller devices are more popular. In 2003, 1.8 million hard-drive music players will get shipped, compared with 1.9 million flash players and 10.6 million MP3/CD players, according to IDC.

"To date, there has been a real difference in form factor between flash-based players and hard-drive players," Kevorkian said. "Even the iPod is bulkier than the flash players."

Energy savings
Density also will increase, Magenis said. Along with stripping out parts, the company has worked on engineering issues such as keeping energy consumption down. The RCA device will be able to run 12 hours on a single battery charge because the drive's motor shuts down between tasks, Magenis said. Shock-absorbing materials in the drive case will allow devices to sustain the shock from a 1-meter drop, he added.

Although a start-up, Cornice has been able to establish at least some credibility early on with large manufacturers--in part because of its pedigree, said In-Stat/MDR's Wolf. Engineers and executives from Maxtor, Seagate, Quantum and other hard-drive makers largely staff the company. Magenis, for instance, was a vice president of engineering at Maxtor. Cornice's chief technology officer, Curt Bruner, served as chief electronics architect at Quantum.

Some of Cornice's employees came from Dataplay, a once-promising mini-disc start-up.

Established manufacturers also are helping the company. Texas Instruments manufactures silicon for the SE, while the platters are made by Hoya, which manufacturers the small, thin disks for a number of companies. The drives are assembled in a factory owned by SAE, a subsidiary of Japan's TDK.

"Fundamentally, SAE is carrying our working capital," Magenis said. Venture investors include Nokia, CIBC World Markets and Texas Instruments.

Competitors are pursuing the market as well. Hitachi Global Storage Technologies, which took over IBM's hard-drive division, is coming out with a line of 1.8-inch drives this year. Currently, only Toshiba markets 1.8-inch drives, and one of the few products that contain the drive is the iPod. The paucity of finished products containing these sort of drives will change soon, said Bill Healy, general manager of the mobile business unit at Hitachi.

Hitachi will come out with a 4GB Microdrive before the end of the year. Flash-memory cards, which now hold 1GB of data, meanwhile, will continue to boost density.

Magenis, though, claims it will be tough to beat Cornice on price. The industry is moving away from flash and toward hard drives for storage, and coming up with a minimalist hard drive takes time.

"It took us almost three years to do this," he said. "Anyone else is literally looking at at least two years."