Today's hard disk drives store data on the surface of a stack of platters by magnetizing small particles that have their magnetic poles aligned horizontally along the platter's surface. Hitachi is perfecting a method for storing data by arranging the particles with their poles perpendicular to the platter, so that the particles can be stacked closer together. This perpendicular recording technique will yield drives with storage densities many times those of today's drives. Hitachi could use this technique to produce 3.5-inch hard drives that store 1 terabyte, and 1-inch microdrives that hold 20GB. Don't expect to see drives of that size right away, though, because Hitachi plans to introduce lower capacity drives initially and then scale up in size.
Seagate is also in on the perpendicular recording game, and has its own plans to bring the technology to market by the end of this year. Toshiba has already announced that they will be using small drives based on the technology in portable consumer electronics, and I'm sure other portable electronics makers will follow suit. (20GB iPod Mini, anyone?)
From a system design standpoint, the big thing to watch for is how memory subsystem and I/O bus bandwidth scale along with hard drive density. If Hitachi were to introduce a 1TB 3.5-inch SATA drive today, it would take close to two hours at 150MB/sec transfer rates to read the entire drive. Of course, I realize that SATA is on track to increase its bandwidth, and that there are higher-bandwidth options. But these kinds of leaps in capacity really bring out the importance of improvements in drive interface and I/O bus technology (i.e. PCIe) for keeping systems balanced.