Source of Cheap 1.5GB Drives?

With the rumors of cheap 2GB iPods floating around, many are asking what storage technology could be used in the new devices. Traditional hard drives and flash memory appear to be too expensive at this time.

One reader points out that a company called Cornice has been producing 1inch 1.5GB Hard Drives since mid year that go for $65/each in lots of 10,000. Cornice was reportedly trying to get these prices down to $50.