2006 was supposed to be the coming out party for holographic storage. Multiple product launches were eagerly anticipated. There was a fair amount of media buzz, complete with analyst estimates of 45M unit shipments and a $125M market by 2010.

The reality today is bleak. Aprilis is gone. Optware has gone into hibernation. Only InPhase is still soldiering on, having banked a whopping $93M of venture capital. They have launched a write once, read only disk drive at $18,000 with disks priced at $0.60/GB. Even with its alleged 160Mb/s data transfer rate (which is merely 2-3x that of a typical tape drive) the solution’s economics will likely limit it to niche applications within media archiving.

I believe that the lack of traction of holographic storage stems from a combination of high technology risk with high business risk. Few people will dispute that it’s no mean feat to reliably store data by bouncing lasers off specialized substances which push the limits of materials science.

But even if those technical challenges are surmounted, the resulting value proposition is hardly compelling. Aside from the usual resistance-to-change issues, the product suffers handicaps that lots of users care about (read-only, high price) and does not approach an order of magnitude improvement in the areas where it’s supposed to have an advantage (access speed, high density).

So while I don’t expect to be pulling out a 1TB holographic storage card from my wallet any time soon, I believe that the underlying holographic technology could still find alternative applications – perhaps by allowing me to enjoy 3D images on my TV without those silly glasses.