To use NAND flash memory or miniature hard disk drives (HDDs)? That is the question many gadget makers ask themselves when designing a new product today.

With Apple, for example, the answer with the iPod Nano meant ditching the HDDs used in most of its other iPods in favor of multi-gigabytes worth of flash storage. Palm, on the other hand, chose to go the HDD route with its 4 GB LifeDrive mobile manager.

There are many other instances of mobile devices with gigabytes worth of memory and quite a few more in the works. According to analyst firm IDC, the storage competition in the consumer electronics market will heat up as the price disparity between the NAND flash and HDDs tightens over the next few years.

You see, while miniature HDDs are the more popular option now, NAND flash memory average selling price will decrease at a 43 percent compound annual growth rate from 2004 to 2009, making it more attractive to vendors than it is now. Price per gigabyte won't be the sole decision criteria, however.

Factors such as total capacity requirements, form-factor, power consumption, weight, durability, data rates, as well as strategic original equipment manufacturer and storage supplier alliances, also weigh heavily into storage technology criterion for device manufacturers.

As a result, IDC's Storage Mechanisms: Disk Program research manager John Rydning says, "We do not expect a "winner takes all" outcome by 2008 as both storage technologies will advance through technology transitions to provide higher capacity products and focus on their respective strengths."

That is, they should look to work to advance each others interest, as they will complement rather than always be in direct competition against one another.

"Instead of viewing each storage technology as a threat, flash and HDD vendors should approach this development as an opportunity to form alliances to broaden and extend their portfolio," adds Celeste Crystal, senior analyst, Semiconductors research at IDC.

A Little History
NAND flash architecture was introduced by Toshiba back in 1989. IBM first shipped the one-inch Microdrive in 1999. Back then you could only squeeze 340 MB of storage into that amount of space.

There is now a one-inch HDD that can hold 6 GB of data. And Toshiba even has a tiny stamp-sized HDD capable of storing 2 to 4GB in the works. Devices like Apple's iPod's and laptops, which hold 60 GB or more, use larger but still small1.8-inch drives.

For more on this topic, see IDC's report A Hard Choice That Won't be Made in a Flash: HDD Versus NAND, which provides an analysis of how the two storage technologies are vying for similar embedded storage opportunities in portable digital devices.