STOCKHOLM, Sweden — Two European scientists won the 2007 Nobel Prize in physics on Tuesday for a discovery that lets computers, iPods and other digital devices store reams of data on ever-shrinking hard disks.

France's Albert Fert and German Peter Gruenberg independently discovered a physical effect in 1988 has led to sensitive tools for reading the information stored on hard disks. That sensitivity lets the electronics industry use smaller and smaller disks.

"The MP3 and iPod industry would not have existed without this discovery," Borje Johansson, a member of the Royal Swedish Academy of Sciences told The Associated Press. "You would not have an iPod without this effect."

The two scientists discovered a phenomenon called giant magnetoresistance. In this effect, very weak changes in magnetism generate larger changes in electrical resistance. This is how information stored magnetically on a hard disk can be converted to electrical signals that the computer reads.

Smaller disks mean fainter magnetic signals, so the ability to detect them is key to shrinking hard disks.

The first disk-reading device based on the effect was launched in 1997 "and this soon became the standard technology," the Nobel committee said.

Phil Schewe, a physicist and spokesman for the American Institute of Physics, said the prize honored "a terrific combination of great physics and huge practical application.

"I can hardly think of an application that has a bigger bang than the magnetic hard drive industry. Every one of us probably owns three or four or five devices, probably more, that depend on billions of bits of information stored on something the size of a dime."

Fert, 69, is the 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 western Germany.

In a telephone conference with the award committee, Fert said he was very happy to win, and to share the $1.5 million prize with Gruenberg.

"This is a surprise for me but I knew that it was possible," he said. "I knew I was among the many candidates."

A former rugby player and now avid sailboarder, Fert told France's Inter Radio that he planned to share some of the spoils of his winnings with colleagues.

"As usual when I get prizes, I share a little with my associates and then I will see," he said. "I don't know. I think I need new sails for my windsurfers."