DVD. Cut the cost.......................
techweb.com
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August 04, 1997, Issue: 178
Section: Hardware
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Q4 DVD market wields two-edged sword, experts say -- Mixed expectations for drives, software
By Gregory Quick
Santa Clara, Calif.-Danger and opportunity are the two opposing sides of the DVD market, according to a panel of analysts from market research company Dataquest, San Jose, Calif., that convened at a company forum last month.
The panel looked at such issues as the impact a lack of content would have on the adoption of the technology, whether DVD would be a must-buy this Christmas and whether it would appear in notebook computers this year.
Van Baker, Dataquest's director of consumer research, said he saw no reason to rush out to buy a DVD drive at Christmas. But he agreed with Scott Miller, the company's senior personal computer analyst, that if someone were buying a whole computer system, he might as well get one with DVD. Eventually, he said, it will be a necessary component for the computer.
When that time comes, the oft-delayed offerings should be available in abundance. "We will see a launch at Christmas [1997] by anybody who is anybody," said Mary Bourdon, Dataquest's senior storage analyst.
All the analysts agreed that the continual delays of DVD's introduction have been nettlesome, but that in the long term, the delays will have a benefit.
With weak launches in Japan and the United States, drive manufacturers have been aggressively cutting prices, which are now around $100 per unit and could drop even further by the holiday selling season, said Bourdon.
She said manufacturers were forced to cut prices to start creating a market. "Otherwise, how do they get to market? There is no infrastructure, no support and a lack of content," Bourdon said.
The price drop will also enable the drives to move into an area they might not have penetrated initially:the low-cost and sub-$1,000 PC market.
Miller said the price reduction was needed because of the increase in popularity of sub-$1,000 systems. If DVD drives cost more than CD-ROM drives, it would not be possible to put them in the increasingly hot low-end segment of the market.
Yet, a lack of DVD media hurts DVD sales. The ability to run DVD movies adds cost to most computer systems, which is likely to make low-end systems a harder sell. To support movies requires additional hardware and AC3 sound, all of which adds to cost, Bourdon said.
This type of problem typifies what the industry has faced since DVD's inception. Last year, one of the biggest challenges was to balance Hollywood's demands for tough encryption of software against the PC industry's needs for a low-cost, low-impact solution.
This problem was apparently taken care of last fall with a software solution, but the holder of the license sat on it until the last few months, said Dale Ford, Dataquest's senior PC analyst.
Another delay:While there is backward compatibility in the DVD specification that allows DVD players to run CD-ROMs and other media, the specification has not been finalized. This is another headache for PC OEMs because, until the specification is finalized, there is no guarantee that DVD will be backward compatible, Ford said.
Content will remain a problem, as was indicated at the recent E3 trade show. DVD development was definitely on a back burner. The high cost of investment in creating original titles that take advantage of all DVD has to offer will cause development time of programs to run from 12 to 18 months, Ford added.
In the portable market, don't expect the same DVD Christmas rush that the desktop systems are expected to experience, warns Mike McGuire, Dataquest's mobile analyst. It is expected there will be a limited number of DVD drives available in the high end of the portable market during the holiday season. Another pitfall:a portable running a DVD movie would use up its battery in less than an hour, he warned.
Copyright (c) 1997 CMP Media Inc. |
