IBM yesterday cut the prices of its smallest hard drive, the Microdrive, by as much as 32 percent.

Microdrives can store up to 1GB of uncompressed data and fit into the CompactFlash slot in PDAs and MP3 players. Using adapters, the drives can also be hooked up to notebooks and desktop PCs.

Big Blue has cut the Microdrive's price per megabyte by at least 50 percent a year over the last two years, the firm said.

The 340MB Microdrive now costs £135, the 512MB version is now £176 and the 1GB Microdrive has been reduced to £258, the company said.

In July, Toshiba announced it would push the storage limit for small drives even further and launch its own PC Card hard drive in Japan. But the 5GB PAMHD005 is more than twice the size of the IBM Microdrives and weighs four times as much.