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Technology Stocks : C-Cube

CUBE 36.29

+1.9%

Nov 21 9:30 AM EST

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To: BillyG who wrote (39082)	3/1/1999 12:12:00 PM
From: Steve Reinhardt	Read Replies (1) of 50808

Don't falling into the trap or be frustrated by the immediate market explosion of DVD players in the China market despite you are going to see many such news releases. The Chinese department store had DVD players on display for sale two years ago the same day Toshiba put its DVD players in the US. The China consumer market is flooded with $75 VCD players and $160 Super VCD players. The cheapest DVD player lists for $250. Most DVD player are $300 and up. But the problem is the disks. Average VCD and Super VCD disks are under $2.00 while rental only cost a fraction of it. On the other hand, DVD disk titles are extermely scarce and pirate them proved to be difficult than people think. It is a crime in China and you will go to jail if you get caught and the Chinese government does make it a point to crack down illegal copying of those DVD disks. Finally, the major DVD players manufacturers will the Chinese factories. And they will be required to pay 10% royalties. The Chinese don't quite believe in I.P. They don't feel like to pay for it. The DVD market according to some observers will take at least another two years to take off. My opinion is that it will probably take longer that that, perhaps three to four years unless the 10% royalties are significant reduced. At this moment, SONY, Philips et al controls the DVD loader. No royalties payment, no DVD loader. Therefore, you will see the Chinese factories are looking for the DVD loader technology. If they got it for little cost and managed to pay less royalties, then the DVD player market in China might take off after two more years. Steve

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