October 15, 2002 4:00 AM PDT
Hard drives: The new VHS tape
A growing number of hard-drive manufacturers and start-ups are touting a new use for the hoary data vault that's been one of the chief PC components for more than two decades. They want to see it used as a portable storage device for gadgets such as set-top boxes, game consoles and digital stereo receivers.
In this vision, consumers would slide drives containing music, digital photos, or recorded TV programs into an empty bay, similar to the bay on PCs that holds CD drives. Drives could also be linked to consumer-electronics devices by way of a USB 2.0 or FireWire connector.
These consumer-electronics items could also come with their own internal drives, but expansion through a portable drive would be inevitable.
"When you start talking about (files as large as an) MPEG-4 video, you need something the size of a hard drive," said Steve Wise, senior director of OEM (original equipment manufacturing) marketing for consumer electronics at hard-drive giant Maxtor. "There is quite a lot of interest in add-on drives."
Set-top boxes that could accept hard drives will likely begin to appear next year and become a mass-market phenomenon by 2005 or 2006, Wise added. Maxtor recently came out with a new line of external hard drives for file backup.
Mike Bergkamp, CEO of start-up Toda Citron, agreed with Wise. "If tape is going away, we need to have something," Bergkamp said. Toda Citron plans to sell what it calls the HardTape, a durable hard drive that will be compatible with TVs and similar products from major manufacturers.
Hard-drive manufacturers have had some success in recent years moving into the consumer-electronics market. Both game consoles and digital video recorders (DVRs), like those used with TiVo's service, contain drives, as do many portable audio players, like Apple Computer's iPod. Helping the hard drives move into the consumer-electronics market is the rapid acceptance of digital entertainment and a need to store those files in an inexpensive medium.
"Digital content will begin to increase as devices like digital audio players and (digital video recorders) become more popular and mainstream, and as that happens, storage devices become that much more necessary--and hard drives just happen to be the least expensive of the bunch," Jupiter Research analyst Michael Gartenberg said.
Additionally, the hypercompetitive drive market is constantly improving both in capacity and price, following a Moore's Law-like curve. The business increasingly yields slimmer margins despite rocketing drive capacities, and several big-name companies have expressed their disenchantment. Fujitsu has abandoned the market for desktop hard drives, and IBM has finalized plans to spin off its hard-drive business in a joint venture with Hitachi.
"There are two main reasons hard drives are going into consumer-electronics devices," said John Paulsen, a spokesman for drive maker Seagate. "Density doubles every year, while the price per gigabyte continues to fall."
Currently, a 60GB drive sells for $75 to $81, according to research firm Converge, and can hold about four and a half hours of uncompressed digital video. Recordable DVD discs cost only about $2, but they can handle just 4.7GB of storage--and users have to buy a recording DVD drive, which can retail for $320 to $430.
In the audio world, the contrast between drives and discs is even more dramatic. A 120GB drive holds about as much music as 192 CDs, according to statistics from Maxtor. Users could either store their tunes on a drive, or carry around a jukebox worth of discs.
Several hurdles loom for both drive makers and consumer-electronics companies, however, and not all drive manufacturers will survive the cut. Reliability and drive life, for instance, will be huge problems.
"Consumer-electronics devices last years, so show me a hard drive that will last that long," said Dave Reinsel, an analyst with research firm IDC. "Hard drives in TiVo boxes are running all the time. Many drives aren't (designed) to be 24-7 drives."
Seagate says it has steadily improved reliability and acoustics (for example, the noise created by spinning hard-disk platters) since 1996 when it began supplying drives for WebTV. The company has opened design centers to work on the early stages of product development with consumer-electronics manufacturers to ensure technological compatibility and low-cost implementation.
Similarly, Toda Citron is putting its efforts into producing drives that can survive typical household accidents. The portable drives it plans to sell come in insulated cases that can withstand a drop from a height of 18 feet onto concrete.
Another huge concern will be digital rights management and piracy, according to Reinsel.
"Those will have to get resolved before we see the proliferation of removable hard drives," Reinsel said. "No one had a problem with VHS, because the quality was degraded. But on hard drives, picture quality is preserved, and the ability to modify and distribute widely is possible."
The content-protection issue may not be as thorny as it seems, said Maxtor's Wise. Cable operators, film studios and music publishers are all intrigued by the early success of the DVR. Satellite broadcasters find that customers who subscribe to DVR service tend to re-subscribe more often.
By putting a hard-drive bay into their set-top boxes, cable operators could gain additional revenue through monthly subscription services without raising expenses much, Wise said. TiVo service, for instance, costs $12 a month.
If anything, the TV and DVR manufacturers will have to allow for expansion just to keep the DVR market going. Most DVRs come with drives with about 30GB or so of capacity. While it sounds huge, one of the chief complaints is that it fills up quickly.
"There is a whole cottage industry that has arisen around how to upgrade a TiVo," said Wise. "Instead of having a third-party open the box, or even break the box, why not have the customer go to a retail outlet and buy an external storage product?"
The current situation
Consumer-electronics manufacturers could also eliminate cost. With a portable drive, manufacturers would only need to invest in a drive bay, about $10, or a connector, a cost low enough to let them make almost all of their TVs DVR-ready, asserted Toda Citron's Bergkamp. Stereos could also inexpensively be made hard-drive friendly.
"Over 80 percent of the cost (of a DVR) is the hard drive itself," Bergkamp said.
Consumers could use the same drive, bought independently at retail, in a variety of devices, thereby reducing overall costs.
Drive sizes have also steadily shrunk, adding to convenience. Toshiba makes drives with platters measuring 1.8-inches across, while many manufacturers make 2.5-inch diameter platter drives. In volume, these 2.5-inch drives cost about $120 to $150.
Still, there is the question of customer indifference and better alternatives. For one thing, the idea is quickly being paced by home networking, which effectively lets consumers tap a PC's hard drive for storage.
Sony, for instance, isn't considering portable drives right now at all, said Todd Titera, marketing manager for Vaio desktop PCs. Instead, the company will promote its Click to DVD software that will let consumers build networks out of PCs and consumer-electronics products. For archiving data, Sony recommends that users burn DVD discs.
In the end, portable drives might wind up being a niche market, predicted Toni Duboise, an analyst at ARS. Still, "it's great that people are still trying to pull the two technologies (TV and PC) together. It gives us a reason to still watch this space."
Others, though, say the numbers work in their favor. By 2006, one of every five drives sold will be into the consumer market, according to statistics from research firm IDC, and the technology to make them portable already exists.
"There is something in each step of the way for everyone," Wise said.