From Nature:
Two researchers who discovered an effect that has dramatically shrunk the size of magnetic storage devices have won the 2007 Nobel Prize in Physics. Albert Fert of the University of Paris-South in France and Peter Grünberg of Jülich Research Centre in Germany split the prize for their 1988 discovery of an effect called giant magnetoresistance (GMR). The Royal Swedish Academy of Sciences announced the award on 9 October in Stockholm. The effect has been heralded as one of the first major applications of the fields of nanotechnology and ‘spintronics’.At the heart of GMR are the spins of electrons, which generate a magnetic field and can be aligned either up or down. An electron can easily pass through a material whose electrons are similarly aligned, but will encounter resistance when it passes through one with electrons aligned in the opposite direction.
This led to devices that are very sensitive to tiny magnetic fields. A hard disc drive stores bits on its surface as a pattern of magnetic fields. Until the discovery of GMR, hard discs used metal induction coils to read out the data. But the laws of induction meant that the coils, and thus the bits, had to be quite large. GMR opened up a way to build much smaller magnetic heads, says Claude Chappert of the University of Paris-South. The discovery revolutionized consumer electronics. “I think this triggered the common use of MP3 players,” he notes.
More here.