The effect is called giant magnetoresistance, but it enables amazing things at the miniature level.

Two European scientists won the 2007 Nobel Prize in physics yesterday for their discoveries of the phenomenon, which spurred some of computing’s most astonishing developments, from video-playing handheld devices to PCs whose storage capacity now seems all but limitless.

France’s Albert Fert and Germany’s Peter Gruenberg independently described giant magnetoresistance in 1988, then saw the electronics industry apply it in disks with incredible amounts of storage.

“I can hardly think of an application that has a bigger bang than the magnetic hard drive industry,” said Phil Schewe, a physicist and spokesman for the American Institute of Physics. Fert, 69, is scientific director of the Mixed Unit for Physics at CNRS/Thales in Orsay, France, while Gruenberg, 68, is a professor at the Institute of Solid State Research in Juelich, Germany. They will share the $1.5 million prize.

Here’s how it works.

As a metal disk spins inside a hard drive, an arm with a sensitive electromagnetic head at its tip hovers over the disk, somewhat like the needle on a record player (though it doesn’t make contact). This head reads bits of data by registering the magnetic bearing of individual particles; it writes data by changing that magnetic orientation.

For disk drives to increase in capacity, those magnetic particles must become smaller, so more can be packed into the same amount of space. But these ever-tinier materials produce fainter magnetic signals, which means the read-write head in the disk drive has to become more sensitive.

What Fert and Gruenberg independently discovered was that extremely thin layers of alternating metals could detect remarkably weak changes in magnetism – and translate them into “giant” changes in electrical resistance.