China: CVDs set to replace VCDs in audiovisual technology leap
07/20/98 China Daily Copyright(C) 1998 CHINA DAILY
The sun appears to be about to set on the era of the VCD player in China as almost all manufacturers have rallied under an unprecedented joint move to make and market a more advanced product: the CVD (China Video Disk) and CVD players.
Manufacturers of VCD players have found it increasingly difficult to maintain their profit growth of the past couple of years as a fierce price war, forced by the entry into the market of a large number of new factories hoping to earn quick money, is propelling sales to near cost prices.
A VCD player, which was sold at more than 3,000 yuan (US$361) a couple of years ago, is now marketed at a little more than 1,000 yuan (US$120).
As a result, major VCD player manufacturers, led by Idall of Guangdong Province and Shinco of Jiangsu Province, met in Shanghai in April and agreed to turn to digital technology to make CVD products, according to Idall chairman and president Hu Zhibiao.
Guangdong Idall Electric Appliances Company Ltd, China's largest manufacturer of compact video disk players, took the lead in this move. China's first digital CVD players made by Idall hit the market last month, while similar products of other major producers are expected to follow soon.
According to a recent survey among 1,000 consumers in 10 major cities, 80 per cent of the people polled said they welcomed the new product.
The CVD players have sharper, more stable pictures than VCD players and their unit price is only about 200 to 300 yuan (US$24.1 to US$36.1) more expensive than a VCD player.
With the prospect of CVD disks hitting the market soon, analysts expect the production of 3 million CVD players in the country this year, accounting for 30 per cent of video compact disk players. The figure for 1999 is estimated at 7 million.
Idall alone is expected to make half a million CVD players this year, Hu said, in addition to 2 million VCD players. Its output value, which stood at only 30 million yuan (US$3.6 million) in 1995, is expected to reach 3.5 billion yuan (US$421 million) this year.
The rapid growth of the VCD industry in China has astounded many.
Sales were only 100,000 units in 1995, but they reached 12 million last year. The output value of the industry amounted to 10 billion yuan (US$1.2 billion) in 1997.
China now has a combined annual production capacity of almost 50 million VCD players a year, while the market potential is thought to be only 15 million this year. |
