You could soon be able to store much more on an MP3 player, digital camera or mobile phone.
Toshiba's drive is not very big at all
Toshiba has developed a tiny hard drive which measures less than an inch across but can hold between two and four gigabytes of data.
The drive, about the size of a £1 coin, was announced at the Consumer Electronics Show in Las Vegas.
The hard drive has emerged as one of the key components in the push to bring computing technologies to the home.
Some video cameras and music players such as Apple's iPod have taken advantage of the shrinking size of hard drives.
Toshiba was the first major manufacturer to come out with a 1.8-inch drive holding up to 40GB, which is used in the iPod and other MP3 players.
Since then, others have raced to catch up. Hitachi and others now sell one inch hard drives that can hold 1GB to 4GB of data.
But Toshiba says it is the first company to break the one inch barrier with its new drive.
"Our new miniature drive is a significant technological breakthrough," said Nick Spittle of Toshiba Storage Device Division Europe.
"It is set to bring explosive growth in smaller and more mobile digital devices, with a host of hot new portable gadgets for the consumer."
Toshiba said it expects the new drive to inspire others to think about incorporating hard drives into their products, such as mobile phones and digital camcorders.
"Our small yet powerful, highly functional drives are an enabling tool for other companies' imagination and creativity, accelerating the fusion of computing tools and consumer electronics products," said Mr Spittle.
TVs and mobiles
Increasing capacity, shrinking sizes and falling prices have led to the use of hard drives in consumer electronics goods, such as digital video recorders.
Samsung has already put a hard drive into a digital camcorder that is slightly bigger than a computer mouse.
In the future, the miniature drives could be built into television sets and mobile phones.
Toshiba expects to start mass producing the drives in the autumn, with its factories churning out 200,000 to 300,000 units a month.