"If you look at the [1-inch hard drive] market today, it's pretty much shrunk to a small percentage from what it was in 2005," said Walker Blount, vice president of storage research for Web-Feet Research.

In part, this has been driven by Apple and its nano, according to Blount, which uses a 2-, 4-, and 8-GB flash drive. Recently prices for flash, which is regarded by many analysts as the technology that will gobble up portable storage, have taken a dramatic dip due to the sheer amount of drives available on the market today. That fact, combined with a shaky future for the 1-inch disc drive, has made it hard to Cornice and others to gain financial backing and figure out a viable business strategy for the future.

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