Three storage industry heavyweights, Seagate, Western Digital and Hitachi, are working on low-cost 2.5-inch hard drives for netbooks. The manufacturers are expecting the new drives to end up 40-50 percent cheaper than regular low-end, 2.5-inch drives. The fact that they are obviously able to deliver cheaper HDD designs makes us wonder why they haven't developed them before the netbook craze started.

PC vendors are expecting netbooks and low-cost PCs to play a major part in their sales throughout 2009. Cutting prices in the netbook market and keeping products competitive is turning out to be quite a challenge for vendors, and netbook prices are relatively high compared to regular-sized notebooks with vastly superior specs. The key components used in netbooks, such as CPUs, LCDs and batteries, cost $20 to $25, but 2.5-inch HDDs cost as much as $45, driving costs up and forcing netbook and HDD vendors to look for cheaper alternatives.

HDD makers will try to cut production costs by minimizing the cost of ICs, platters and heads. The first drives are expected to have a capacity of 80GB on a single platter, while later versions will pack 100 or 120GB of storage. Availability is expected in 2H 2009, and the move is bound to have a negative impact on SSD adoption in this market segment.

Although SSDs offer high pefromance and low energy consumption, their cost is preventing widespread use in netbooks. Currently most cheap netbooks, such as Acer's Aspire One or Asus' Eee PC 900, use tiny and cheap SSD drives, while more expensive models, with the exception of the Asus S101, rely on HDDs for storage.

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