ABI Research: Hard Drives in Cellular Handsets Could Spell the Beginning of the End for Portable MP3 Players

ABI Research reports that "mobile phones offering generous data storage, enabled by small hard drives with ever-greater capacities, may soon allow the cellular handset to rival or surpass the portable MP3 player as the mass market mobile music device of choice."

ABI notes that slowly handset manufacturers are bringing hard drive enabled handsets to market such as the "Nokia's N91 with 4 GB, and most recently Samsung's SGH-i310 with 8 GB."

Alan Varghese at ABI Research said, "As the cellular handset becomes the one device that the world carries, the standalone MP3 player may well be left behind. What's important to many users is having one device that handles mobile music as well as the other functions—phone calls, digital photography, email, web browsing—now performed by mobile phones."

Varghese believed "there is a point of diminishing returns beyond which a user doesn't care whether the device can store 2000 songs or 7500. MP3 player vendors may try to defend themselves by offering even greater disk space, but over time they may still lose market share."

ABI also pointed out tha "mobile operators are already setting up iTunes-like stores of their own to serve a public equipped with MP3-capable handsets. Additionally, given that most MP3 players are stocked primarily with songs from consumers' own music collections, rather than only those downloaded from an online music store, high-capacity MP3 handsets provide users with the flexibility of listening to those tracks on a device that's almost always with them."

I'm not sure I agree with this. There are a couple of issues here regarding durability and cost. Flash memory, while more expensive than disk storage on a per GB basis, offers up more design flexibility for handset manufacturers and durability for consumers.

My handset takes a decent amount of abuse and I'm not sure a hard-drive enabled handset could withstand it. On the otherhand, drop an iPod shuffle and all should be fine.

Regarding cost, as I mentioned hard drives have a GB per $ cost advantage over flash memory, although memory prices coninue to drop. While you might be able to stuff more storage in a micro hard drive, they still have a lot of fixed manufacturing costs, which will generally add $80+ to a device's bill of materials.

So if there are "diminishing returns beyond which a user doesn't care whether the device can store 2000 songs or 7500" then it probably makes more sense for manufacturers to stick with flash memory than add a fragile hard drive...