Tiny hard disk drives will allow high-end "smartphones" to reach their full potential by allowing massive local storage for enterprise applications, according to research published this week by IDC.

But the phones using these hard disks won't be for everyone, as they are likely to be slower, heavier, easier to break and more power-hungry than their counterparts with flash memory, an IDC analyst said. The research coincided with figures from IDC and Gartner showing that sales of traditional handheld computers are levelling off, while smartphone sales are booming.

IDC said that demand for storage on phones will be driven by increasing network bandwidth with the rollout of 3G systems; some phones are also beginning to include wireless LAN connectivity. Hard disks will make mobile phones more useful for music, imaging and reference applications, as well as business-oriented services such as GPS navigation, IDC research manager Dave Reinsel told Techworld.

Current hard disks aren't suitable for mobiles, however, as they use too much power, are too large and too expensive, IDC explained. Drive cost needs to drop below $50, and perhaps even below $30 before it can be considered for mobiles, said Reinsel. Prices have remained high because of the small size of the mini-hard disk market and the paucity of competition - last year, 1.8in drives accounted for only one percent of all disk drives worldwide, and one-inch drives for 0.1 percent. Cornice is now selling a one-inch drive for less than $60, said Reinsel.

While hard disks have now become more widely used with the advent of iPod-type music players, those devices only allow six to eight hours of battery life. "That is simply not enough for a cell phone. You'd need 24 hours at least," Reinsel said.

Even as hard disks mature, solid-state technology such as flash memory will keep a performance advantage. For users, that means buying a hard-disk-enabled smartphone will inevitably mean tradeoffs, Reinsel said. Hard-drive devices will take longer to start up, and the drives will probably be more prone to failure than solid-state memory. Hard-disk devices will probably also be more expensive, he added. "As you add more and more functionality, it could reach a threshhold where it's too painful, and people will say, 'I want my phone to be a phone, and if I want something else I will get another device'," he said.

However, there will be a market - initially with high-end business devices - for phones with hard drives and elaborate functionality, IDC predicts. "Will there be phones out there that do everything, absolutely," Reinsel said.

He did not venture to predict how long it would be before hard drives could solve the power-usage problem, noting that both hard disks and batteries are evolving at a slow pace. Moving to smaller drives will help, as less power is needed to rotate a smaller disk.

Smartphones are already on the point of dwarfing sales of traditional handheld computers, according to industry observers. Phones using high-end operating systems will only amount to two percent of the worldwide market this year, but the market was still 10 million handsets in 2003 - a figure that will quadruple this year and continue steady growth through to 2008, according to recent figures from ABI Research. Together, smartphones and PDAs with wireless connections will amount to nearly a quarter of all handsets by 2009.

By contrast, sales of traditional handhelds are levelling off, according to industry analysts. All handheld vendors combined shipped 2.2 million devices worldwide in the first quarter of this year, an 11.7 percent decline from the same quarter last year and 33.1 percent down from the fourth quarter of 2003, according to IDC figures published earlier this week.

Gartner on Friday released similar figures, finding that 2.7 million devices shipped in the first quarter of this year, down 4.6 percent from last year. The figures are slightly different because Gartner and IDC do not use exactly the same definition for handheld computers.

The decline is not a blip on the radar, but reflects market saturation - at least in the US, according to analysts. Worse for handheld vendors is that sales of their high-end devices are not growing. PalmOne, HP and Dell are all experiencing little growth in their high-end segments, although consumer-oriented devices like PalmOne's Zire boomed. "There will always be a handheld market. But going forward, the converged device [smart phone] will generally have a larger market," IDC analyst David Linsalata told IDG Newswire earlier this week.