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To: BillyG who wrote (38350)	1/21/1999 1:51:00 PM
From: DiViT	Read Replies (1) \| Respond to of 50808

Taiwan: DVD -player Sales Fall Short in 1998 01/21/99 Taiwan Economic News Copyright (C) 1999 China Economic News Service; Source: World Reporter (TM) With digital versatile disc ( DVD ) products expected to become the mainstream of audiovisual equipment for the next generation, many of Taiwan's manufacturers of information and electronic products are striving to develop the DVD player market. Due to technological limitations and market size, however, some of them did not do as well as expected last year. Industry analysts predicted in early 1998 that total domestic demand for DVD players would top 65,000 sets for the year, but the actual figure is estimated at only 50,000 units--and most of the players sold were well-known Japanese brands. Locally made products are still not very popular in the domestic market. The main reasons for the disappointing sales, in addition to the general economic slump, are the high prices of the players and the small amount of DVD titles available. A DVD player here is tagged at around US$600, while a VCD (video compact disc) player goes for less than half that amount; and only around 1,000 legal DVD titles are available, much less than the number of VCD titles. Another problem is the lack of a universal compression standard for DVD , which makes consumers hesitant about buying players at the present time. No player can support both of the decoding technologies that are now used: AC-3 from Dolby Digital, and the Digital Theater System (DTS) movie theater sound system. In addition, the high audiovisual quality of DVD products requires the support of high-fidelity digital TV and multi-channel digital sound systems, which are not yet very popular in the consumer market. To stimulate the willingness of consumers to buy, local DVD player manufacturers are either cutting their prices or promoting packages that include both players and software. Royal Information Electronics, for instance, is offering its DVD players at a sale price of NT$14,900 (US$458 at NT$32.5:US$1); Esonic is promoting its products together with audio systems; and Tatung is allowing buyers of its players to watch 100 DVD titles free within a year after purchase. The key components and core technologies used in the production of DVD players are still controlled by large American and Japanese firms. Some domestic manufacturers are seeking to do OEM (original equipment manufacturer) production for those firms, primarily performing assembly work. One such local company is Acer, which obtains its DVD modules from Panasonic of Japan. Some local manufacturers, however, are stressing self-design, purchasing key components such as chipsets and pickup heads from the U.S. and Japan and making everything else themselves. This process takes longer to get a product on the market, but it gives the producers involved a more solid hold on manufacturing technology and R&D capability. Companies adopting this approach include Royal Information, Esonic, Sampo, and Tatung. Acer, Royal Information, Esonic, and Tatung all had DVD players on the domestic market by the end of last year. Sampo has completed development of its players and is waiting for final quality certification by a DVD verification laboratory. Numerous other companies plan to enter the market this year, including ADI, Teco, Sanyo, and Proton Electronics. Industry analysts urge all of the manufacturers involved to speed up the pace of their R&D to cope with fierce competition in the world market. Mainland China, for one, is becoming a serious threat as it works with Japanese companies to expand its DVD player production. There are already 23 lines turning out DVD players in the mainland in cooperation with leading international partners such as Toshiba and Matsushita. The mainland's monthly production capacity for DVD players is predicted to reach 1.75 million units next year.