South China Morning Post.......................
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TuesdayÿÿMarch 4ÿÿ1997
C-Cube gears up for DVD sales drive
DUSTY CLAYTON in Los Angeles
How would you like to buy a cutting edge DVD movie player for about the price of a high-quality video cassette recorder?
United States semiconductor-maker C-Cube Microsystems has just announced a family of highly integrated DVD product chips that it expects will shave 50 per cent off the price of a DVD (digital versatile disc) player within 12 months and spur mass production of the product in China, Korea and Japan.
C-Cube's new product line has three main components: decoder chips for high fidelity DVD home theatre movie players, encoder chips for real-time compression of a two-hour movie on to a single disc the size of a CD (by title manufacturers), and DVD cards so that personal computers can utilise the enormous storage capacity of DVD-ROM - which is seven times greater than that of CD-ROMs.
The key to the cost-effectiveness of C-Cube's solutions is the company's "system on a chip" approach. For instance, the company has incorporated eight DVD functions into a single decoding chip for movie players. Those include MPEG-2 video decoding, Dolby Digital decoding, MPEG audio decoding, sub-picture decoding, on-screen display and audio-video synchronisation.
C-Cube chief executive Alex Balkanski said: "DVD players are generally in the US$700 to $1,000 range now. We will be in the position of halving that price point to $400 to $500. That is where volumes will start to take off.
"With cost reductions in our chips and higher production volumes, the price should drop below $400 after Christmas."
Initial production of DVD players and DVD ROMs with C-Cube's chip set would begin later this quarter in Korea and Japan through partners such as Samsung, Toshiba and Aiwa, Mr Balkanski said. Production of DVD players and movie discs would begin in China by the end of this year and could involve more than 50 manufacturers.
"The China market has been primed for DVD with VCD [video compact disc]," he said.
"Our ambition is to have every one of our VCD partners in China making DVD players."
Since its introduction in China in late 1994, the video CD player has emerged as the fastest-growing consumer electronics product so far. Mainland consumers, attracted by the player's affordability (about US$150) and its high-quality images, are expected to buy about 12 million of them this year.
There are more than 15,000 Chinese-language movies encoded on video CDs, which retail for $2.50 each. What is more, video CDs do not decay in humid weather or with the passage of time, like video cassettes.
Mr Balkanski said that the DVD players for the China market would be compatible with video CDs, although the image quality of DVD discs would be far superior.
"Asia will be a very big part of the success of DVD, but this will be a worldwide format," he said.
DVD's battle to gain a permanent place in the consumer electronics marketplace is far from over, however. Several major Hollywood movie studios are still reluctant to agree to have their movies encoded on discs that work with DVD players because of worries over copyright protection.
Some industry analysts wonder whether consumers will decide to wait until a recordable DVD player goes on sale in 1998 or 1999 before investing in one.
Experiencing the true movie theatre-quality sounds and images of DVD at home also involves investing in an expensive TV - the bigger the better - and a Dolby Digital (AC-3) sound system with special speakers.
Those purchases, together with the movie player, push the total cost of a system up to nearly $2,000, even considering the price breaks.
Mr Balkanski said: "You can't deny that DVD will show better on a big-screen TV and that you need to invest in AC-3 to get the full surround-sound effect. But my feeling is that people will buy a full-featured DVD player now with the intention of upgrading the rest of their equipment later." |
