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To: DiViT who wrote (36726)	10/13/1998 10:10:00 PM
From: John Rieman	Read Replies (2) \| Respond to of 50808

SVCD to move out of China................................... eet.com Electronics manufacturers ready SVCD systems for market By Anthony Cataldo EE Times (10/13/98, 1:53 p.m. EDT) HONG KONG — Jumping on the opportunity to upgrade their product lines while keeping manufacturing and licensing costs in check, a raft of Asian consumer electronics manufacturers showed off video CD players based on China's new Super Video CD (SVCD) standard at the Asian Electronics Forum. Momentum for the standard has built to such a point that some vendors are getting ready to sell the players in other countries outside of mainland China, where consumers may not be ready to pony up the cash to purchase full-fledged DVD systems. At least five Chinese Video CD vendors exhibiting here said they have started or will soon begin to sell SVCD systems, which use an MPEG-2-based video format officially announced by the Chinese government last month. These include Esonic Technology, Jiangsu Shinco Electronic, Skyworth Electronics, SMC Multimedia and Yanion Co. While these vendors expressed optimism about the long-term prospects for DVD, they said a large number of video CD manufacturers in China are better equipped to produce SVCD players and have more to gain in the near-term by quickly moving to mass production of SVCD systems. Moreover, consumer electronics companies here said SVCD gives them a badly needed opportunity to freshen up their product offerings, and with little risk. Just as importantly, SVCD allows them to do so without paying into a patent licensing pool, which is required of makers of DVD players. "Many Chinese vendors do not prefer DVD because they will have to pay a lot for patents," said C.T. Teoh, manager of the exports for Esonic Technology Corp. (Taipei), which will nevertheless introduce its own SVCD compatible portable DVD player by year's end. Others called the patent issue a sore point for many consumer electronics vendors here. "There are many concerns about patent costs, especially in China," said Chris Liang, senior officer for the components marketing division at Sony Electronic Devices Hong Kong Ltd., which demonstrated a video player equipped with Sony's new CDX2585 servo DSP controller, which was designed for SVCD systems. China's consumer electronics companies are hesitant to pay the DVD 'tax' because they are suffering from fierce competition as a result of an oversupplied market in video CD players. There are an estimated 600 manufacturing lines making video CD players in China today, said Qian Benyuan, president and chief executive officer of China National Electronics Import & Export Association. That overcapacity has sent the price of video CD players below $100 in China. Meanwhile, DVD systems cost about $350, which is still considered too much for consumers accustomed to cheap video CD systems. Into this scene comes SVCD systems, which are estimated to cost about $120, making them something of a happy medium for manufacturers, observers said. "The VCD market in China is quite terrible for every manufacturer," said Liang of. SVCD "gives them a new choice. It's low cost and the quality is similar to DVD." SVCD is essentially a cross between DVD and Video CD. It is based on the MPEG-2 video compression standard, which allows it to take advantage of DVD decoder ICs from companies like C-Cube, ESS, LuxSonor and Zoran. SVCD resolutions reach 480 x 576, which is better than Video CD and but lower in quality than DVD. It also requires data transmission rates of 2.2 Mbits/second, which is twice as fast as Video CD but only a fraction of DVD's 10-Mbit/s bandwidth. Aside from the need for a faster servo control device, all of SVCD's other specifications are similar or identical to Video CD, observers said. What's more, there are already 500 Asian movie titles and 300 karaoke titles for SVCD, said Ross Yuen, a sales representative for Jiangsu Shinco Electronic Group Co. Ltd. (Jiangsu, China), which was is now offering six new SVCD units. But Hollywood movie studios haven't yet signed on with SVCD, he said. Even so, SVCD has garnered enough momentum that consumer electronics companies are mapping out plans to sell the players in countries outside of China. Many consumers in these countries already use low-resolution TVs and aren't willing to shell out more for both a new large screen TV and a DVD player, especially in light of the dreary economic conditions in Asia. "We're going to target Hong Kong first, and the next step will be Singapore," Yuen said. "Indonesia and Malaysia are also suitable for SVCD." But SVCD will probably not take hold in markets such as Japan and Taiwan, where consumer have higher disposable incomes, Yuen said.