I don't completely agree with Redherring. In 1995/96 when VCD was being established in China, Oak Tech and Windbond both introed MPEG-1 decoders. Both failed to penetrate the market. C-Cube's mistake was not pimping Sony/Phillips/Matsushita/Toshiba, it was not pursuing Chinese OEMs more aggressively. When ESST's chip started shipping, they shipped to Chinese OEMs who had been making Audio CD players. ESST got almost a 50% market share overnight. If Cube had been pushing its decoder chips, and lowering the price, ESST would not have penetrated as deeply.
A second point is that China does not allow new technology to be introduced, unless local businesses benefit. There were large tariffs placed on completed players being shipped to China, and almost no tariffs placed on the components. If C-Cube didn't sell its chip to the Chinese, somebody else would have.
Supporting just Sony et al, was not an option. However, the market was handled poorly. In 1997, C-Cube had to lower prices by over 60%, just to regain control. |
