Samsung is entering the competitive miniature hard-disk market later this year.

The company's first product will have a storage capacity of 4GB and be available later this year, said Kim Il Ung, vice president of Samsung Electronics' semiconductor business.

Kim didn't provide any other details but a Samsung spokeswoman said that the drive will 0.85-inch and become available in the summer.

It will put Samsung head-to-head with Toshiba, currently the only company that has a 0.85-inch drive on the market. Toshiba's version has only 2GB but the company said last week that it will have a 4GB version available in the middle of the year.

Competing products are all based on one-inch drive platters that offer more storage capacity but are physically larger. In devices such as music players, the slight size difference might not be particularly important but in products where a higher premium is attached to size, such as cell phones, the difference could be valuable.

While the vast majority of miniature drives are used in digital music players or other portable electronics products, Samsung Electronics is the only company to-date to have fitted a drive into a cell phone.

The SPH-V5400 handset for the South Korean market was unveiled last year. At the Cebit show in Germany in March, it also showed its SGH-I300 with a 3GB one-inch drive, based on Windows Mobile and GSM-compatible. Launch details are yet to be announced.

Samsung Electronics' new drive won't be competing with just other miniature drives but also flash memory. "A couple of years ago, 1GB and higher MP3 players was a 100 percent Microdrive market," Kim said. Microdrive is the brand-name used by Hitachi for its one-inch drives but is sometimes used by others to refer to the miniature form factor drives.

Today the boundary has shifted and all 1GB capacity MP3 players use flash memory and silicon storage has begun to encroach into the 2GB capacity class market, said Kim. He sees this boundary continually moving over the next few years, especially as the price-per-bit keeps moving in flash memory's favour.

"This will be a continuing trend as long as we can provide 50 percent price drop per year," he said. "Which means by the end of this year, the majority of 4GB or lower MP3 players will be replaced by flash."

Samsung expects the price of flash memory to drop by roughly half in each of the next two to three years and said similar price falls for miniature hard-disk drives will be difficult to achieve, Kim said.