While consumers have gone bonkers for music players and other sleek devices sporting tiny hard drives, disk drive companies say there's little room, and even less desire, for further reducing the size of the drive platters--the silver disks that spin around and hold data.More info at Cnet
Since the platters constitute a substantial portion of the overall volume of the drive, this means a ceiling looms for shrinking drive sizes and potential increased competition from flash memory.
Hard disk drive companies don't plan to launch even smaller HDDs

Disk drive companies said that there is little room to make even smaller hard disk drives. This kind of HDDs has become very popular recently with the huge increase of digital music player shipments like the Apple iPods and the Creative Zens.