One of the hallmarks of Microsoft is that we dream big - Steve 'Understatement' Ballmer
In the beginning, flash memory products were offered with one "speed" and one quality. Now SanDisk has three different lines of flash memory products in the CompactFlash arena ranging from no-frills "vanilla" to the "Extreme III" line, certified for a minimum of 20/Mbps data rates and temperature ranges from -13 to +185 degrees F, so you can toss it into a freezer or come close to boiling it and it will still work even if you or your equipment doesn't.
Even that segmentation is a bit bland. On the low-end, SanDisk is plugging "Shoot and Store" 32 to 128MB Flash products, selling them down at the local grocery store as an impulse buy. Status-conscious gamers can get "special" SD and Sony cards in a variety of flashy bright colors. Real status junkies can buy the Cruise Titanium, a flash drive with a specially fabricated "space-age" metal casing that can take over 2,000 pounds of pressure. Finally, SanDisk - and Lexar and PNY and nearly every other consumer flash memory company - is now manufacturing MP3 players, waging an interesting battle with established players Apple and IRiver and a horde of Asian manufacturers. If that's not going from vanilla ice cream to a hot fudge sundae, I don't know what is.
Hard drive manufacturers are just starting to move out of the vanilla phase and adding a small dash of sprinkles, mainly by encasing their products into external cases and slapping a USB 2.0 and/or Firewire interfaces on them, plus a side of software. Several manufacturers are looking at dropping in a Wi-Fi chip and antenna into their next-generation external product so you don't even have to futz with cables. Not bad, but still not really imaginative. Western Digital briefly experimented with enhancements to their external box such as a special gamer drive and multi-media flash readers, but those models didn't get a lot of traction among buyers.
Perhaps the next brave step for drive manufacturers is to move into multimedia, by taking a hard drive and putting enough electronics on it to serve as a media storage centre. How much is enough? The ideal design would put together a suitably large (250-300 GB) drive into a case with a simple LCD, a 16xDVD-RW drive and a fast Ethernet or GigE interface. It would have enough "smarts" to be able to recognise CDs and DVDs and be able to copy the contents of the removable media onto the hard drive through the push of a button. It would also have enough "smarts" to do one-button backup, telling the user how many DVDs it needed to conduct a full back up of the hard drive - so you can run out and buy disks before you actually execute a full backup.
All other functions, including one-off copying of protected works onto DVD, would be conducted through a web interface so users could get the "Thou Shall Not Dupe" message and go burn off 20 copies of their latest TV show for giveaways at the next office party. The record and movie industries might not like such a device, but it's a logical and inevitable step.
An alternative growth path puts drive manufacturers pushing their products into consumer devices of all shapes and sizes over the next 5 years. There's no need or reason why Sony should sell a 300 CD jukebox or a 400 DVD jukebox - yet they still do!
Smaller size portable hard drive/DVD-reader combos make perfect sense, freeing people from having to lug around a half-dozen DVDs in the car or plane. Finally, the falling price of the 4-6 GB "micro" drives means they'll ultimately show up (initially at over-inflated prices) in home routers for web servers. Why stick a PC with serving as a "media server" for the family photos when you can dump it all on the router? µ