Hard Drives Off Memory Lane

Seagate Technology (STX Quote) CEO Bill Watkins concedes that hard drives have lost ground to flash memory in the MP3 market. But the market for hard drives remains robust in other consumer-electronics areas, and the market for digital music is likely to augment sales, Watkins said in a separate interview at CES.

"The battle's going to be in handhelds," Watkins says. "You have to recognize flash as a threat [there], because if you don't, you're being stupid."

As for flash's prospects in the PC world, though, "I don't see any interest at all," he says.

The growth of flash memory outside of the PC world is undeniable. In addition to being found in MP3 players, the storage media is now commonly used in cell phones and GPS devices, to store photos taken by digital cameras, and in external USB hard drives.

Barnetson estimates that 70 million flash-based MP3 players were shipped in 2005 and that the amount will grow 20% this year. Helping drive the market will be increasing capacities: while flash-based players top out at about 6GB now, by the end of the year, they should hit 8GB and eventually 20GB.

"Within five years, the vast majority [of the MP3 market] will become flash," says Barnetson.

He and Samsung are in a position to know: The company controls about 60% of the NAND flash market, according to Barnetson.

But the company sees growing demand for flash in other markets, too. As flash memory becomes less expensive and holds more photos, the company believes users will treat it like film.

Barnetson says that consumers, instead of erasing their memory cards after uploading them to their computers, will just buy new cards and keep the old ones as archives.