VCD in Singapore.......................
globalsources.com
Cover story: Video CD players
Singapore: Upgrades to serve last years of VCD
Singapore's high overheads mean the republic is home to few A/V manufacturers for the mass market. Surprisingly, there are at least three that make VCD players, however. Even more surprisingly, two of those three are sufficiently confident about the prospects for the line to be developing new players.
The third company, and dissenter, is ACS Innovations International Pte Ltd. ACS ended production of VCD players three months ago, citing loss of profit margin and the futility of trying to compete with DVD as reasons for bailing out. The company is currently clearing inventory, marketing manager Thomas Chua said.
The regional operation of Dutch electronics giant Philips, Philips Consumer Electronics (S) Pte Ltd, suggests that ACS' decision may be premature. "VCD is likely to be succeeded by DVD, but in anything from two years to four years," marketing and sales manager Vincent Kan said. Right now, VCD is the most popular video disc format in mainland China and Southeast Asia, and is also picking up in India, Kan said.
Latecomer S-Com Systems Pte Ltd echoes that view. The firm fell into VCD player manufacturing almost by accident, and in the eight months since putting out its first model has sold 10,000 units, general manager K.W. Foo said. The threat from DVD means that S-Com's stint as VCD supplier will be short, but the firm is nonetheless developing more models.
"Demand for our version 3.0 is still good, especially in Malaysia, India and Thailand," Foo said. "We will continue to produce VCD players for at least another eight months, and we expect our new model to attract even greater demand." The new player, scheduled for launch in October, will have SVCD and MP3 audio playback capability, he said. Projected sales are between 2,000 and 3,000 units per month, Foo said, with the product expected to ride on the popularity of MP3.
S-Com originally planned just to offer customized chipsets to other manufacturers, but found that most of its customers were reluctant to take up VCD player production. Rather than simply abandon its chipset project, the firm engaged a subcontractor in mainland China to build VCD players using the solution it had developed. S-Com now markets the products under its Trek brand name, Foo said.
S-Com may be enthusiastic about VCD players, but the firm acknowledges that the project is strictly short-term. In comparison with DVD and MP3 players, demand for VCD has been decreasing and prices are dropping sharply, Foo said. "More mainland China-made products are surfacing, and they are of reasonable quality," he said. Oversupply and falling demand mean prices will continue to drop over the next six months, he said.
Philips identifies the same trend, but Vincent Kan is phlegmatic. "Price erosion is a common phenomenon in the consumer electronics market. VCD is a typical consumer electronics product in the sense that the price erodes over time," Kan said. VCD is nonetheless in decline, he concedes, and DVD very much in the ascendancy.
Preparing for the next generation
To prolong interest in the older technology, Philips is upgrading its products. The firm recently added digest and "time to" features to its players to enhance the search and playback functions, Kan said. "Previously, these features resided on the disc, and many discs do not have them. With digest and `time to,' they become disc-independent," he said.
The latest models from Philips include the SD101 and SD301 SVCD players, with a CD7 mechanism and Ercos error correction chipset as well as the digest and "time to" features. Subsequent models will include improved image handling, Kan said.
"The latest SVCD standard basically uses a double-speed loader and an MPEG-1 decoder. It provides better resolution, but instead of using two discs to store a movie, it may need three. Our higher-resolution player will become available in October, and we anticipate that this will set the industry trend," Kan said. The firm has also started R&D for MPEG-2 and MPEG-4 players, he said.
How long these standards will remain current is open to debate. The answer probably lies in understanding how quickly DVD suppliers can bring down their costs. "DVD makers still face a shortage of loaders, and the DVD player costs twice as much as a VCD player," Kan said. Over time, the shortage will ease, and DVD players will become more affordable, he said. "Ultimately, the DVD player will win the race over VCD and SVCD players," he concluded.
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