Their achievement is "a major milestone" for holographic data, says Han Coufal, manager of science and technology at IBM's Almaden Research Center in San Jose, CA. "It shows upward mobility and a roadmap to higher and higher density."

The most immediate commercial application for this higher-density storage, Curtis says, is in archival data storage. There, storage demand is increasing, he says, as broadcasting companies create more digital content and video increasingly comes in high-definition formats, resulting in huge file sizes.

Currently, large data archives, such as those at banks, are stored on computer tape –- plastic strips with a magnetic coating -- that can hold anywhere from a few kilobytes to hundreds of gigabytes of data. But this medium is easily susceptible to damage from moisture and temperature fluctuations. In order to ensure reliable recovery, "typically, people would have to rewrite to a new tape every couple of years," Curtis notes. Holographic discs are made of plastic that is more robust than tape, he explains. InPhase has shown in harsh environmental tests that the medium is good for up to 50 years.

Hitachi Maxell, a leading producer of computer tapes and CD-ROMs, began investing in InPhase in 2002. But while InPhase has a solid business partner, the technology is still relatively young and hasn't proven itself in the marketplace. Indeed, a drive will cost as much as $1,500, and each disc, which is 10 centimeters across and 1.5 millimeters thick, will be priced at $120 -- many times the cost of computer tape drives and disks. Additionally, holographic discs are not currently rewritable. Curtis says that InPhase is working on rewritable technology, but it most likely won't be available for a couple years.

As holographic technology continues to develop rapidly, though, Curtis says there is no reason why future holographic discs can't be smaller, and built into consumer electronics such as cell phones, PDAs, and MP3 players. A disc the size of a postage stamp could hold 25 gigabytes of data, he says, or the equivalent of 6,250 songs. InPhase is still in the early development stages of holographic storage for consumer devices, however. "It's still a few years out," Curtis says.