The mature technology maintains lead as price slows Blu-ray’s PC penetration.
Suppliers of optical disc drives in China continue to focus on DVD rewritable types, leveraging broader adoption and better performance than earlier variants and price advantage over Blu-ray. Reflecting worldwide trend, makers expect the former to hold out in the next three years as Blu-ray builds up market acceptance.
At present, DVD rewritable accounts for nearly 90 percent of mainland China’s output, while Blu-ray counterparts have an estimated share not exceeding 3 percent. The latter is at least three times more expensive so demand remains low. Although the price gap with older variants is narrowing, DVD rewritable units with faster reading and writing rates remain the more cost-effective option. Current quotes range from $30 to $35, while DVD combo drives list between $26 and $29. The difference was wider three years ago at $40 to $55 and $35 to $40.
This focus on DVD is reflected in disc production, which emphasizes the said format, thereby helping to sustain the lead of DVD drives. Discs based on this standard boast larger capacity at 4.7GB compared with 1GB for others. As a result of increased and diverse supply, a rewritable DVD now lists only $0.15 to $1.20 more than nonrewritable units, down from the $0.75 to $2.50 difference three years ago. This is why manufacturers of the format do not see a threat from USB flash drives and portable HDDs. For the same capacity, the first is quoted 10 percent less than these storage alternatives.
China companies offer mostly external DVD rewritable drives, which represent nearly 90 percent of their total output. The type is more suitable for slimmer and thinner computers, which have made ODDs an option instead of an integrated part. In addition, the versatile configuration can be used with desktop and notebook PCs, expanding the application base further.
Major Japan, South Korea and Taiwan brands continue to dominate the line. The mainland’s forecast aggregate production of ODDs this year is less than 5 percent of the worldwide total.
The top five makers are Hitachi-LG, Toshiba-Samsung, Sony-NEC, Lite-On and Quanta, which combined account for an estimated 85 percent of global supply. Most offer internal slim drives. The products have loaders that are 9.5mm in height, compared with regular variant’s 12.5mm, and are priced higher by $4 to $6.
Slow Blu-ray line
There are fewer than 10 manufacturers turning out Blu-ray drives, supplying them on demand. China companies entered this line in 2008 but due to the financial crisis, product development was suspended in 2H09.
Hongkong South Fortune, for instance, rolled out models, including combo types, in 1Q09. It stopped R&D when the financial crunch favored low-priced PCs and peripherals that excluded the high-end drive.
With economic recovery, makers are pursuing it again this year, targeting to launch new versions in 1H11. The endeavor, however, will remain marginal because of the line’s minority status and competition with Blu-ray players, which are gaining more traction.
Although growing, Blu-ray penetration in PCs pales in comparison with stand-alone varieties in the home entertainment sector. The latter is anticipated to reach 42.1 million units by 2013, from 9.1 million last year, according to iSuppli. The technology’s enhanced video quality is more suitable for large-screen TVs than smaller computer monitors. In addition, the price of a player is 10 to 20 percent lower than its PC-based counterpart. For more on “DVD rewritable units stay dominant”.