Maxtor Corporation, a well-known HDD maker, and Linksys, a division of Cisco Systems, this week announced that the companies will collaborate on development of storage systems that connect to other appliances via wired and wireless networks. The new devices are likely to serve in the so-called digital homes.

According to In-Stat/MDR, 2004 is the year for strong growth in home networking. entertainment network connections are expected to double from 2003 to 2004, and to reach 51 million by 2005.

“The initiative between Maxtor and Linksys brings together two companies with strong pedigrees in bringing value to consumers, and is a testament to the rapidly growing end-user demand for whole home entertainment distribution and storage,” noted Mike Wolf, principal analyst at In-Stat/MDR.

Maxtor and Linksys will also begin to promote each other’s products - the Maxtor OneTouch external hard drive and the recently announced Linksys Network Storage Link (NSLU2). With the Storage Link on a wired or wireless home network, the Maxtor OneTouch drive can serve as a central storage location for everyone on the network to share, store and access their data and digital content such as photos, music and other media. The Maxtor OneTouch drive connects to the Linksys Network Storage Link via one of the two USB ports, and the Storage Link connects to a router, enabling network connectivity to other devices around the home or office.

For a limited time, the USA residents who purchase a Maxtor OneTouch USB drive with the Linksys Network Storage Link will receive a special mail-in rebate. Later both companies are likely to deliver storage devices with integrated network controllers.