CES: DVD formats face off

Two groups are striving to make their rewritable DVD format the standard, as prices finally come within reach of consumers
Written by Richard Shim, Contributor

The two groups striving to make their respective formats the standard for rewritable DVDs used this week's Consumer Electronics Show as an opportunity to demonstrate their progress.

At separate, simultaneous events at CES here, the Recordable DVD Council and the DVD+RW Alliance brought together partners to discuss their efforts so far. As the DVD rewritable market heats up, a lot is riding on which format, if any, becomes dominant.

"The price of drives is coming down after a big drop in 2001, so they're finally getting down to prices consumers are comfortable with," said Jon Peddie, chief executive of Jon Peddie Research.

The Recordable DVD Council advances products approved by the DVD Forum, which consists of companies that manufacture discs and drives for the DVD-RAM, DVD-RW and DVD-R formats. The forum includes companies such as Hitachi, Pioneer and Panasonic.

Its rival, the DVD+RW Alliance, supports the DVD+RW format. Its member companies, which also manufacture discs and drives, include Hewlett-Packard, Dell Computer and Sony.

At the Recordable DVD Council event Wednesday, various members pointed to the shrinking cost of drives, discs, and a recent DVD Forum-approved specification called DVD Multi as signs that formats supported by their group will gain momentum in 2002.

Angel Cheng, a deputy sales manager for disc maker RiTek, expects that her company will continue to lower the cost of discs and predicts a big jump in disc shipments for all formats. Cheng estimated that this year DVD-R discs will fall from $8 each to $5 (about £5.6 to £3.5), that DVD-RW will drop from $13 to $10, and that DVD-RAM will dip from $15 to $12. She expects volumes for DVD Forum-approved discs to increase from 33.9 million last year to 100 million in 2002 and 179 million in 2003.

The group is also counting on DVD Multi to help sales. The new specification allows future drives to read all three DVD Forum formats: DVD-R, DVD-RW and DVD-RAM. Hitachi is expected to release a drive based on the specification early this year.

But John Spofford, chairman of the DVD+RW Alliance and an HP vice president, said there are downsides to Multi DVD. "It doesn't preserve the investment that consumers have made in DVD drives that they bought before the spec came out," he noted.

Spofford also said the recent sales figures show that DVD+RW products are already selling well.

According to NPD Intelect, Spofford said, HP's DVD+RW drive, which began shipping in October, was the market share leader in November. A recent price cut on the drive to $499 will only help future sales, he added.

DVD+RW discs cost about $16 each, but a price drop is expected by the end of the month. HP representatives would not specify the size of the price cut.

As for consumer preference, DVD-RW is seen as mainly for people looking to record video and then play it on consumer DVD players. That's because to store new files, the disc must first be erased entirely.

The DVD+RW and DVD-RAM formats are seen as having the upper hand for data storage because they allow people to store and erase files in the same way they can on a hard drive. Spofford said that the software for DVD+RW drives does not yet enable people to randomly store data, but he added that a software patch will be available soon.

DVD+RW supporters also consider their format good for recording and playing back video because it is compatible with many consumer DVD players on the market.

The two rival groups are trying to establish recordable DVD standards in hopes of tapping one of the most successful trends in the consumer electronics market: DVD players.

Market researcher IDC estimates that 170 million DVD players shipped last year. Some companies are also betting that camcorder owners will want rewritable DVDs for sharing video.

"DVD players and camcorders are very popular and stand to become only more so," said Rob Wait, an HP worldwide business manager.

This week, HP announced a new Pavilion desktop with a DVD+RW drive. The PC costs $1,599, not including a display.

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