Professor Grünberg died last week, said a statement by the Research Centre Juelich near Cologne, mourning the loss of "an excellent researcher" and "well-respected and popular colleague".
Grünberg received the 2007 Nobel prize for physics, together with French scientist Albert Fert, after both had separately discovered so-called giant magnetoresistance (GMR) which led to a breakthrough in the development of gigabyte hard disks.
Their work laid the foundations for the field of spintronics, which exploits the quantum mechanical spin of electrons for micro- and nanoelectronics, with applications ranging from video tape to MP3 players and hard disks, said the centre.
"Without exaggeration one can say Peter Grünberg and his discovery of giant magnetoresistance decisively changed our lives," said the institute in a statement.
"Without him, modern computers and smartphones as we know them would be unthinkable."
Grünberg also received the 2006 European Inventor of the Year award by the European Commission, the German president's Future Prize in 1989, and honours in Israel, Japan and Turkey.
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