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DVD dollars draw near

DVD dollars draw near

Resellers can expect to see a dramatic surge in demand for Digital Video Display (DVD)-ROM drives this year as entertainment, games and other applications proliferate and awareness of its potential as the next big thing in storage increases.

But following the same patterns that followed the rise of the CD-ROM technology it is tipped to replace, there is still some time before DVD technology matures enough to shrug off a number of standards issues and becomes sufficiently cheap for OEMs to justify building drives into their low-cost computers.

Until now, DVD technology has received much publicity but little support from major OEMs, largely due to the fact that applications and games developers are yet to throw their weight behind it, waiting instead for evidence of high enough consumer uptake.

`It's a chicken and egg scenario,' said Graham Penn, head of research at analyst IDC Australia. `The majority of software developers won't make a big effort until there's a market.'

However, Penn warned that resellers mustn't be complacent and should prepare themselves for any sudden movements in the market. `As we saw with CD-ROM technology, DVD is also likely to experience a sudden seven or eight weeks of intense demand signalling the start of the first major wave [of uptake].'

Resellers won't be making money today, he added, but should start stocking the software.

Penn believes that by mid year the channel will experience very high demand for DVD hardware and applications.

This will kick off with the fad phase which will likely deliver easy sales as consumers grab the technology before its range of applications are fully understood, pressured in part by a sufficient volume of movies and games. `Consumers will seek to future proof themselves.'

Stuart Boyd, national peripherals manager at Harvey Norman, was less than upbeat about the market, however. `There are a lot of things in the way of DVD at the moment,' he said.

For instance, while most computer manufacturers are including DVD drives in their top-range machines, consumers `are really not sure what they actually do other than play movies'. And the answer at the moment, he said, is nothing.

`You will find consumers willing to pay a little extra for the a built-in drive but as for stand-alone units, there's nothing setting the world on fire at the moment. The task of setting the player up for your PC and/or TV still requires more effort than most 'plug-and-play'-eager buyers are ready for,' he added.

And as for applications, there doesn't appear to be much happening on the software or entertainment front, although, according to Boyd, there are many conflicting views on this.

According to Nick Angelucci, marketing manager at US multimedia giant Creative Labs, the movie market is what's driving this whole DVD craze around at the moment.

`This market is strong right now. You just need to see the number of titles available to see how much this is taking off. It's bigger now and prices are much lower than they were 18 months ago.'

The fact that Microsoft has released its Encarta Encyclopaedia for DVD certainly suggests an existing desire to develop applications for the technology although analysts believe it will certainly take much more than this to secure its fate.

According to analyst Dataquest in the US, approximately 10 per cent of all computers sold in that country last year shipped with DVD drives, either pre-configured or as separate after-market products. This equates to about 6 million drives, which seems a reasonable base for developers to work with.

But according to Mary Craig, a principal analyst at Dataquest, while DVD drives do carry the potential to revolutionise the multimedia and storage industries, there are a number of worrying hurdles in its way.

`There is no compelling reason for OEMs to integrate DVD-ROM drives into their lower-priced PCs as no clear advantage to use DVD exists for the consumer,' she said.

One of the reasons CD-ROM technology has been so successful is the lack of any competition in the product category at such a low price point. And nor will there be any sign of a rival optical drive until DVD-ROM reaches the same low price point.

And developers still consider the base too small. `Ironically, we believe that the potential market inhibitors are exactly the same as the potential market accelerators,' Craig added.

`The factors required to make DVD-ROM surpass and thus replace CD-ROM drives in unit shipments are the same factors that made CD-ROM a mass market, mainstream product: content in the form of games for consumer multimedia PCs, software distribution, and low prices.'

Yet another obstacle in the way of DVD at the moment is the existence of many removable storage alternatives offering more functionality than DVD-ROM for end users.

These include the 56x- and higher-speed CD-ROM drives, CD-RW, Zip and SuperDisk high-capacity flexible drives.

There are also a number of other new storage technologies in the wings such as solid state and various holographic technologies. The benefit of these is that there are few moving parts and therefore the promise of better reliability and performance although their arrival is, according to analysts, at least three years away.

In the meantime, another issue likely to hamper the DVD evolution is the exorbitant royalties being charged by manufacturers, Dataquest's Craig said. The result is that a number of high volume producing computer manufacturers will have to mull whether to embrace the technology or not while those companies that do will be isolated to the handful of companies belonging to the original group which founded the DVD Forum and own the patents.

The major threat to DVD, IDC's Penn believes, is the failure of manufacturers to agree on standards.

The current DVD standard was hurried along in a bid to resolve conflicts between a number of big electronics manufacturers.

`What emerged was a compromise from competing technologies,' he said.

This has left a number of important issues unresolved such as guidelines for manufacturing single- and double-sided DVD as well as the more storage-intensive `multi-layer' DVDs.

Backward compatibility is also a problem amongst manufacturers while the whole issue of regional compatibility is something consumers are unfortunately forced to deal with in a fairly hit and miss manner.

Either way, DVD's time will come, Penn says, and soon. `Its a spiral. Retailers should be stocking software now,' although, he cautioned, `Probably on consignment so they don't do their shirts.'

Other industry observers are predicting that the technology will make its mark first on the publishing industry, where speed and storage are an ongoing battle for users. Apple Computer is probably leading this trend, which is evident in schools.

Uptake in the corporate market will be assured, Penn believes, by the arrival of writeable DVD drives which are promising to allow users to back up close to 5GB of data on a single disk.

Any optical medium is still very slow to write to, however, which rules out DVD becoming a mainstream secondary storage option any time soon.

The key for resellers, however, is software applications, games and movie titles.

`It's the Gillette razor blade model all over again,' Penn said.

`DVD manufacturers will beat each other's brains out trying to get market share.'

`Prices will fall, which means that dealers will only have a short window within which to make any margin on DVD drives. `We are at the trickle stage of applications at the moment but the turnaround is going to get huge very quickly.

`From a retailer's point of view, you need to keep an eye on what's happening and not miss the first wave.'

Two computer manufacturers that have already demonstrated a firm commitment to DVD are Toshiba and Apple.

Toshiba now ships a DVD drive with its latest Portege range and is seriously considering making the drives standard on all computers very soon.

`I think ultimately most of our computers will come with some sort of DVD drive in the future,' said Toshiba Australia spokesperson Sue Wheeler.

Claiming industry leadership in DVD technology for computers, Apple expects to affect a transition towards DVD within its key markets of publishing and education where both video editing and of course better storage are in high demand.

The two latest iMacs, the iMac DV (digital video) and DV special edition both come with DVD.

According to Myrna van Pelt, corporate affairs head at Apple Australia, DVD will become the standard for video storage.

`Apple has already adopted DVD as a standard on its platform.'

According to recent figures published by Australian Video Camera Magazine, one third of all 165,000 video cameras sold in Australia last year were digital cameras.

It also reported that the camera industry was expected to sell more than 200,000 digital video cameras this year.

`This demonstrates the relevance of DVD to both the PC and broader multimedia and video-production industries. DVD is another step in the evolutionary progress of storage.'

Despite the obvious attempts of numerous electronics manufacturers to market stand-alone DVD drives, van Pelt said that Apple would continue to include built-in DVD ROM drives in anticipation of their becoming standard and ubiquitous.

`From Apple's perspective, we don't expect to be producing stand-alone DVD-ROM drives,' she said.

Apple claims that sales of its two latest iMac's with DVD drives and Digital Video have been the highest. Both the iMac DV and DV special edition offer Digital video compatibility, DVD-ROM drives and Apple's highly publicised movie editing software, iMovie.

`Apple is certainly leading the uptake of DVD technology throughout the world,' van Pelt claimed. `We are way ahead of the competitors.'

Apple even claims that digital video has greatly increased the appeal of iMacs amongst Australian schools, many of whom are `now incorporating video editing into their school curriculum', van Pelt added.

Like the CD-ROM, which is reaching the end of its reign (providing DVD doesn't fail), DVD is expected to have a life span of about five years until it is itself superseded by newer, next-generation solutions in the holographic and solid-state arena.

But, according to IDC's Penn: `While the hot technology for storage today is DVD, the technology is still in its infancy.'

Sony, HP push rewritable DVD format

By Michael Drexler

Sony and Hewlett-Packard, in a bid to set a standard for rewritable storage systems, have announced they will begin selling the world's first DVD+RW (digital versatile disk + rewritable) drives as early as next month in the US.

The companies will ship DVD+RW 3GB internal drives for between $US600 and $700 later this year, Sony and HP spokesmen said last week. HP will make its drive available to some customers starting in June, while the Sony product will be on shelves in the US a few months later, they said. Sony will decide whether or not to sell the drives worldwide after looking at sales figures in the US, according to a company spokesman.

The rollout of the first DVD+RW drives is the latest move in a battle over rewritable storage that some observers say will replace video tape and be used as high-capacity storage systems for PCs. The product is positioned against the DVD-RAM (random access memory) drives being sold by Matsushita Electric Industrial and others, including Toshiba and Hitachi.

Sony will build the drives and both the Japanese vendor and HP will sell them under their separate brand names. The two vendors initially expect production to be 10,000 to 20,000 drives per month, according to representatives at the companies.

In addition to functioning as backup drives for high-end PCs, DVD+RW drives can read most digital disk formats, from DVD-ROMs (read-only memories) to audio CDs, with a few modifications, according to a representative at Sony. The drives will not, however, read DVD-RAM disks.

Depending on the design of the drive, DVD-RAM drives can also read different formats, according to a spokesman at Toshiba. Compared to DVD+RW disks, DVD-RAM disks have a slightly lower storage capacity at 2.6GB per side, though a Toshiba spokesman said that his company would ship a 4.7GB DVD-RAM drive in the US toward the end of this year.

A key distinction between the formats for end users may be the maturity of the technologies. While DVD+RW drives are new to the market, vendors been selling DVD-RAM drives since late last year, the Toshiba spokesman said.

DVD+RW's backers, in addition to HP and Sony, include Philips, Ricoh, Mitsubishi and Yamaha.

Meanwhile, late last year, Panasonic Disc Services and Eastman Kodak have formed a new joint venture called Matsushita Media Manufacturing LLC of America.

The new entity will specialise in manufacturing optical disks such as those for the DVD (digital versatile disk) format, the company said.

It will combine intellectual property and technical expertise from each company and also assume ownership of Kodak's current optical disk manufacturing plants in Ireland, and Mexico.what's new from . . .

. . . Apple

The iMacDV Special Edition is the latest to emerge from Steve Job's iMac factory and carries with it the most impressive list of specs you are likely to find on any computer hovering near the $3000 price mark, although that may even be a little unfair to Apple.

Like all the latest iMacs, the DV Special comes with the Intel-conquering 400MHz G3 chip, 13GB ultra ATA hard drive DVD-ROM, built-in modem , 10.100 ethernet, airport, 2 USB ports and 2 firewire ports.

With this sort of power and the iMac's easy-to-use design, users will have no trouble shoving their favourite DVD movie or game straight in. Also, now that you get iMovie as well, you can download moving pictures from your analog or digital camcorder and fiddle about with the editing tools and even drop the movie back to the camera later on, thanks to Apple's Firewire technology.

The DVD drive is even a slot load, meaning you don't get the drive tray poking out every time you want to play or remove a disk.

All iMac DV Special Edition computers come with a copy of A Bug's Life so you can check it out straight away.

It is priced at $2999 RRP.

Apple

13 3622 http://www.apple.com.au

. . . Creative Labs

Creative Labs, having parted ways with former Australian distributor Creative Pacific, is taking charge of its own sales and distribution in Australia.

The latest DVD drive product to emerge from the US multimedia giant is the PC-DVD Encore 8x Dxr3, which is designed to offer better colour video processing at high speeds thanks to the MPEG-2 decoder, increasingly appearing on the feature lists of rival drives.

In addition to the video quality, Creative lends some of the interactive gaming features its has made a name with this drive with the Dxr3 board taking DVD content and feeding it to a receiver or Desktop Theatre 5.1 for `shaking' audio.

The PC-DVD 8x Dxr3 also offers 8x speeds, although analysts are predicting that 8x will be the standard before too long if you can hold out until the prices of these come down a little.

This drive, as with all the other features here, is compatible with Windows 95, 98 and 2000. Creative also plans to release an Apple DVD drive this year following the signing of a recent distribution agreement with the company.

Available now, the PC-DVD Dxr3 is priced at $599 RRP.

Creative Labs

(02) 9666 6100 http://www.americas.creative.com. . . IBMIBM now has its Think Pad and FDD Bay Drive upgrade module available to Australian ThinkPad 390 and selected iSeries users.

The main feature of the product is that it offers two drives in the one space, which is obviously handy for mobile users. The DVD capacity supports all industry standard DVD-ROM and CD-ROM applications in parallel with support for an industry-standard diskette drive.

IBM claims that the drive has a capacity of 17GB and is priced at $814 RRP.

IBM

13 2426 http://www.ibm.com.au

. . . Panasonic

Panasonic has already asserted itself in the DVD player market but hopes to make a mark on the PC business with its new SR8585 DVD-ROM Drive and LF-D103 DVD-RAM Drive.

The SR8585 drive is a sturdy and reliable option for those consumers looking for good video quality at a reasonable price without the bells and whistles. It can handle all DVD formats spanning DVD video and Type 2 DVD-RAM removable storage disks. Two big pluses for the SR8585 over its predecessor the 8583 are less noise and more importantly an 8x as opposed to 5x drive speed (its CD speed is 40).

The LF-D103 DVD-Ram drive is designed for those users looking to create and edit their own DVD movies to play either on their PCs or TV DVD player. It will write to a standard DVD-RAM disk and reads a long list of DVD and CD formats. It supports Windows 95, 98 and NT4.0. The SR8585 is priced at $333 while the LF-D103 DVD Ram drive has an RRP of $1318. Panasonic is distributed by:

ADO (02) 9417 5233

http://www.panasonic.com.au

. . . Toshiba

The latest DVD offering from Toshiba is the Slim Line DVD/CD-ROM PC Card Drive. It is lightweight portable peripheral which connects to all Toshiba notebooks via the PC card slot.

The drive is a backwards-compatible 4-speed DVD and 24x speed CD-ROM drive so is not nearly as fast as most of the competing products out there but is a no-hassle option if you're already using a Toshiba. It is also a soft DVD which means it has no additional software and plays immediately.

The drive uses Toshiba's power management system, enabling the product to draw power from the PC-Card slot. It has also been designed to be virtually silent during use, a claim few drive manufacturers could make today. The drive will be available through Toshiba Resellers in March/April at an RRP of $1037.

Toshiba 1800 021 100 http://www.toshiba.com.au


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