While prices and sizes continued to contract as capacities increased, IBM sold its disk drive business to Hitachi Ltd. for about $2 billion in 2003. That unit became Hitachi Global Storage Technologies. And now, those more than 200 vendors are down to eight or nine, with just Seagate, Hitachi Global Storage Technologies and Western Digital Corp. manufacturing disk drives in the U.S., said Bill Healy, senior vice president, who joined the company from IBM with the sale.

Hitachi scientists say that capacity will continue to double for at least the next 10 to 20 years, Healy said. Currently, disk drives are as small as 0.85 in. for MP3 players, ranging up to 3.5 in. for use in servers. A 1-in. drive today holds about 10GB, which in 20 years of doubling will reach a terabyte, he said. "In the size and shape of a domino, you could have a terabyte." Two billion disk drives have been sold to this point, with another 2 billion forecast in just the next four to five years, he said.

In celebration of the disk drive's 50th anniversary, Hitachi announced Wednesday that it has achieved a new areal density record of 345 gigabits per square inch using perpendicular magnetic recording technology. This represents an increase of more than 2.5 times the areal density of today's highest-capacity drives, the company said.

By 2009, Hitachi predicts that 345 gigabits per square inch would result in a 2TB 3.5-in. desktop drive, a 400GB 2.5-in. notebook drive or a 200GB 1.8-in. drive. In the first half of 2007, Hitachi expects to bring hard drive areal density half way to the 345 gigabits per square inch mark with a 1TB 3.5-in. product.

While other technologies -- most recently flash memory and holographic storage -- are starting to challenge it, the hard disk is still winning out on speed and cost, said Craig Butler, manager of product marketing for disk, storage-area networks and network-attached storage at IBM. "Over the entire history of the disk drive, people have been saying, 'If we can just get this other technology to work, it'll replace the disk drive.' And each time, disk drive companies have been able to keep the economics such that the disk drive was a better alternative."