Toshiba intends to begin sample production next year of a coin-sized hard-disk drive that can hold up to 3GB of data.

The new drive contains a disk platter that is 0.85in in diameter. The whole drive is about the size of a coin and has a data capacity of between 2GB and 3GB, said Midori Suzuki, a spokeswoman for Toshiba.

Toshiba will demonstrate a prototype of the drive at the CES show that takes place in Las Vegas in January 04 and plans sample production from the middle of 2004. Commercial production could begin as early as 2005, Suzuki said.

At present, the smallest commercial hard-disk drives in mass production have 1in platters. These products include the MicroDrive range of Hitachi Global Storage Technologies and the Storage Element drive that was launched earlier this year by Colorado-based Cornice.

The 1in drives offer data storage capacities of up to 4GB in the case of the MicroDrive. But they are too large for some portable electronics products, leaving makers with little choice but to use the much more compact but more expensive flash memory.

While flash memory meets the physical size requirements demanded by products like digital music or video players, personal digital assistants and mobile phones, the increasing ability of such devices to handle multimedia applications requires a high-capacity and low-cost storage medium. This is pushing drive manufacturers to experiment with sub-1in drives in an attempt to meet both physical size and data capacity needs.

The market for 1.8in and smaller hard disk drives is expected to grow more than seven-fold over the next five years, according to data from market analysis company Coughlin Associates. The company estimates shipments of such drives will total 3.3 million drives this year and grow to 23.7 million in 2008.