A great book to study about this very thing is
The Innovator's Dilema. The entire first section is a study of the history of HDD's and the rise and fall of the great companys that made them.
To summarize a part of it: Drives started out as 14 inch platters, and were for the really big mainframes. Then far inferior 8 inch platters emerged. Although the big computer market(mainframes) for the time didn't want anything to do with them, a new type of computer emerged that loved them: the mini. The 8's were more reliable because their smaller physical size but the storage capacity was too small for the mainframe. Eventually the 14's storage capacity far exceeded any needs for the mainframes and the 8's storage capacity reached a level that was right where the mainframes needed(and the price dropped), so the switch was made, but the mainfrain concept died away a few years later.
The same held true for the 8 to 5.25 platters. The smaller storage, more expensive drives had no place in the major market for the day, mini's, but the emerging market of micro's embraced them. Eventually the technology matured enough for mini's to use them also, but the mini concept died away a few years later.
Then the 5.25 to 3.5. The smaller and more reliable drives found a niche in desktops and eventually replaces 5.25's when their storage capacity increased.
Now we have 2.5 drives. Yes they are more expensive, but have found a niche in laptops. But their current storage capacity is almost at the point of the desktop's market demand, so I see them replacing 3.5's in 5 years.
After that gets foggy. Will a drive like IBM's 1 inch microdrive become the underdog, eventually having a 200GB storage and replace 2.5 drives in laptops, then another 7 years down the road the desktops die? Or will a form of solid state memory take its place?
