VCD player prices continue their drop. MP3 feature hot.............
globalsources.com
Cover story: Video CD players
Posted: Sep. 23, 1999
Pricing mayhem throws supply into a tailspin
In years to come, the buying and selling of video CD players is likely to be remembered more as an insane rollercoaster ride than as a rational and integral part of the consumer electronics business. Consider the numbers: From a baseline of zero products four years ago, mainland China produced an estimated 15 million VCD players last year. Twelve months ago, its supply base peaked at 500 makers, including a sizable and highly irregular cottage industry; today, 40 percent of those makers have disappeared.
Prices have slumped by up to 50 percent in a year, with another 15 percent or 20 percent due to come off the top in the next six months. In no time at all, the technology has run through versions 1.0, 1.1 and 2.0 to 3.0 and SVCD. Add to that cross-compatibility with an alphabet soup of CD formats.
The good news for anyone seeking peace of mind in this business is that DVD promises to wash the whole lot away within the next three years. It may even be sooner. The price competition for VCD players has decimated the industry in Taiwan, Korea and Hong Kong, but mainland China too has suffered, to the point where as many as 60 makers are now believed to have developed DVD players as they prepare their escape from the line. Although DVD prices are still too high to displace the enormously popular VCD player, the mainland's first 800,000 DVD players should be out on the market by the end of the year, and costdowns will follow fast.
Until DVD claims the marketplace though, there are still opportunities for VCD suppliers and buyers. super VCD players with the very hot MP3 capability are readily available; multimedia systems offer the key selling points of interactive games playing and tutoring; and portable players with TFT-LCDs are holding their price and their marketability. And if you happen to work in a developing market just discovering the VCD player, prices are lower than they have ever been and quality, if you look carefully, is at its peak.
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