A 120GB hard drive that's suitable for iPods should be released by Seagate by December this year.

Seagate CEO William Watkins spoke to BusinessWeek to describe the advantages hard drive technology holds over its flash-based alternatives. He recognises that as flash memory capacities grow, hard drive sales may see some challenges, but the technology maintains one key advantage: its lower cost per gigabyte of storage.

"It will be a price-per-gigabyte battle," Watkins said. "They have better power, we handle video better. But we're working on power, and they're working on streaming video."

Watkins reveals that he has apporached many vendors, including Toshiba, with offers to buy their hard drive businesses as they focus efforts on flash.

While he doesn't claim Seagate's new 120GB drives will ship in future iPods, he does remark: "We have this new opportunity in 1.8in drives, which is starting to grow for handheld video."

He adds that Apple's AAPL iPod is one video device, but there are a lot of people putting out handheld video devices. "We did not have a drive for that [video device] business in capacities of 60 and 120GB. We will have one in the December quarter and we think that will be a nice little [sales] driver for us," he said.