Hewlett-Packard's announcement earlier this week that it's working on a miniscule wireless chip, called Memory Spot, has prompted some experts to speculate that the device could revolutionize how digital information is stored and shared. The chip -- which is half the size of a grain of rice -- can hold up to four megabits of information, enough for minutes of audio, short video clips, or hundreds of pages of text.

This tiny wireless chip is capable of storing audio, video, pictures, and text. When attached to or imbedded in paper, it can add more media options to photos, postcards, and other documents. (Courtesy of Hewlett-Packard)

Because it's so small, and potentially cheap, HP's chip can be either attached to or embedded in various objects, including paper, says Howard Taub, vice president of research at HP. For instance, by using a device called a reader to extract the information stored on the chip, Memory Spot could provide an audio clip for a photo, a revision history of a paper document, or supplementary video footage to explain a complex topic in a text book. It has the ability to "make paper or a document more dynamic," he says.

Additionally, the chip could be beneficial in the health-care and pharmaceutical industries, for example, in hospital wristbands to hold a patient's medical history and keep track of doctors' notes and the patient's progress, potentially reducing errors. Also, if encoded with information and attached to a bottle of pills, it could verify a drug's authenticity, as well as provide instructions and information about side effects and harmful interactions.

Although Memory Spot is currently a research project and HP does not yet have plans to commercialize it, the chip could eventually be sold for $1 or less, according to Taub, and Memory Spot readers could be available on cell phones, PDAs, and printers.

HP's chip is based on technology called a radio-frequency identification device, or RFID, which consists of a small chip and a wireless antenna. RFID tags are used in merchandising as a replacement for bar codes. Although much RFID research has been aimed at increasing the range of the readers so that tags can be read from more than 20 feet away, the HP researchers tried to solve a different problem. The group wanted to know how it could "store more on the smallest chip," says Taub.

Memory Spot and traditional RFID share a couple of features: both contain data and wirelessly transmit it, and both can operate without a battery. HP's chip and some types of RFIDs harvest energy from a reader when it comes within range. When an electrical current on the RFID reader comes near the RFID antenna, it causes current to flow in the circuitry of the tag or chip, allowing stored data to be accessed.

But conventional battery-free RFIDs can hold only a few kilobits of information, useful for storing a product code, for instance, but not much else. Also, this data can usually be programmed into the tag's memory just once. In contrast, Memory Spot can hold up to four megabits of data in Flash memory, and information can be written, deleted, and rewritten to its memory many times.