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Where were you on Tuesday, September 7? Struggling to get back to work mode after a three-day weekend? If so, then its understandable if you missed the small announcement issued by Samsung on that date. The two-paragraph press release seemed innocuous enough, but its ramifications will likely be felt around the world. The company proclaimed that it was releasing the worlds first cell phone with a hard drive.

The SPH-V5400 model phone, which will debut in Korea next week, comes equipped with a postage-stamp-sized hard drive storing 1.5 gigabytes. That’s a massive increase in capacity over the flash memory that most cell phones ship with today. The new phone also features a one-megapixel digital camera, a high-resolution, 5.6-centimeter liquid crystal display, a software-based MP3 player, e-book software, and Korean-English dictionary software. The device will sell for the equivalent of $800.

So whats the big deal? The technology industry works under the maxim, build it and they will come. Build faster processors, and the applications taking advantage of the speed will arrive. Build more storage and the industry will find ways to fill it. Up until now, cell phones have made do with storage capacities that are tiny by todays standards. Most cell phones max out around 100 megabytes, while home computers ship with 40, 60, 80, or 100 gigabyte drives. A cell phone sporting 1.5 gigabytes suddenly opens itself up to more data possibilities, and begins encroaching even more into the domain of portable music player and PDAs.

Now couple the possibilities that arise from bigger storage with the fact that the cell phone is one of those rare devices that people need no convincing to own. In fact, theyre willing to put up with coverage thats frankly subpar in many cases just to be reachable. So you have a device that people truly want, is getting a massive storage upgrade, and is serviced by networks that desperately want to increase their data traffic revenues and take advantage of their expensive high-speed networks. That’s pretty compelling.

Granted, the phone is expensive, and it will be awhile before it makes it to the United States. Until the price comes down its doubtful that it will see much market penetration. Samsung representatives did not respond to requests for comment on distribution plans for the phone. But the economics of technologyand of cell phones in particularmean that it wont be long before more phones appear with hard drives, upping the storage capabilities and increasing the possibilities for what the devices can do.

One and a half gigabytes is puny compared to the dozens of gigs shipped with even the lowest end PCs these days, but its still plenty of room to store a good amount of music and text files, and a fair amount of video data. Using the most common compression format, 1.5 gigabytes will hold about 450 songs, or some 35 to 45 CDs worth of music. When the music software with these phones gets better and the storage capabilities increase, whats the reason to shell out a few hundred dollars more on a separate digital music player, further cluttering up your pockets or purse? Neil Strother, an analyst with In-Stat, estimates that by 2007, roughly 70 million cell phones could ship with hard drives. That’s about 10 percent of the total that will be sold that year.

Strother admits that his estimate may be a bit aggressive, but it rings true to me. Cell phones are one of the few devices that people dont need to be convinced to carry, unlike PDAs or iPods. And when cell phones start shipping with hard drives, youre going to see people using them as portable multimedia devices. This is good news for wireless service providers, who have been searching for something to jumpstart their data traffic revenue. If the industry is happy with two-kilobyte text messages careening through their networks, imagine their joy when subscribers start downloading multiple megabyte songs.

This is still a couple of years away, and my scenario is far from guaranteed. But people want to do more with phones than just talk, and the new hard drive phone opens up a lot of opportunities to do so. Remember: there was a time when people scoffed at the notion of putting cameras on cell phoneswho’d want that, some people wonderedand phone manufacturers charged a hefty premium for camera phones. Now these are being subsidized and their quality rivals that of entry-level digital cameras. And the market is taking off, with IDC predicting total worldwide units sold of camera phones will increase from 93.2 million this year to 289.5 million by 2007.

It will take awhile for hard drive phones to replicate those numbers. But once consumers realize the possibilities that come with mass storage on a handheld device, and once market economics drive the price down, hard drives will become as indispensable in cell phones as they are in computers.

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