One of the main barriers to the mass uptake of DVD (digital videodisk) technology may be about to come crashing down.
Last week California-based C-Cube launched a chip which it claims will bring down the cost of a DVD player to around $500 (#333), making them more than three times cheaper than those available today.
The chip, the ZiVA DVD decoder line, incorporates MPEG-2 video, Dolby Digital, MPEG audio, sub-picture, on-screen display, linear Pulse Code Modulation audio, multiplexing and audio/video synchronisation on one chip.
DVD is backward compatible with CD-ROM but stores much more data. Initially, it will have the ability to hold about 4.7Gb of data, compared to CD-ROM's 680Mb. But despite this advantage over CD-ROM, industry analysts have said the price of DVD players must drop to around $500 before widespread sales of the technology takes hold. Dataquest analysts predict that just 2.4 million DVD chips will be sold this year.
Despite the slow adoption of DVD technology, IDC believes it will eventually replace CD-ROM as the primary medium for games, entertainment, education, training and other multimedia software.
DVD players were launched in Japan at Christmas, but demand was initially weak due to the lack of DVD titles. The players are just becoming available in the US, while they are not expected to hit the UK until the end of the summer.
Frost & Sullivan agres with IDC on DVD's market potential. In a recent report, David Schwartz, an analyst at the researcher, noted: "The compact disk and optical disk drive (ODD) industry has experienced strong growth since the late 1980s. In 1996, the market totalled over $6.5 billion in worldwide revenues. The CD and ODD drive segment has led all other drive segments for the past several years."
Frost & Sullivan predicts the CD and ODD industry will undergo major transitions over the next two years as drive producers switch to producing new drive technologies. By 2003, these new technologies are expected to account for the majority of sales in the CD and ODD drive market.
"DVD is the most significant of these new drive technologies," said Rufus Connell, another analyst at Frost & Sullivan involved in the report. "They are expected to account for the majority of drive revenues beginning in the year 2000. The successful introduction of DVD technology is expected for a number of reasons, including substantially higher capacity than CD technology and the ability to be used for different applications."
Industry analysts cite two major reasons for the slow adoption of DVD: the higher cost of DVD players compared to CD-ROMs; and the shortage of DVD software titles, partly due to copyright licensing issues.
Film produces in Hollywood were among the first to embrace DVD as a alternative format to CD-ROM. But their DVD titles will not play on DVD machines bought in countries outside the US because of regional codes or 'flags' built into the disks. These codes are there to protect US film studios who do not want their films appearing on UK TV screens before they appear in British cinemas.
But despite the copyright protection issue and the relatively high cost of DVD players, analysts believe it is only be a matter of time before DVD becomes a success.
The situation is often compared to the introduction of CD-ROM in the mid 1980s. CD-ROM was initially prohibitively expensive. It took about eight years for the price to drop to a level that people could comfortably afford. DVD is likely to catch on much more quickly than CD-ROM, thanks in part to C-Cube's new decoder chip.
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