DVR Prices Expected to Plunge

The average selling price of DVD recorders is expected to fall by as much as 50 percent later this year as Taiwanese shipments of DVD recorders increase sharply, a government-backed market research firm in Taipei says.

Taiwanese hardware makers excel at producing large volumes of IT hardware products at low cost. The ability to produce large volumes of IT products at low cost has made Taiwanese hardware makers the production leaders of many hardware components and devices, such as laptop computers. And Taiwanese companies will take a larger share of the market for DVD recorders as prices fall, Market Intelligence Center (MIC) says in a statement.

MIC is part of Taiwan's Institute of Information Industry, a government-backed think tank set up to support the development of the country's IT industry.

On the Increase
Taiwanese companies, including BenQ and LiteOn Technology, shipped around 1 million DVD recorders--including DVD+RW drives, DVD-RW drives, and DVD-RAM drives--worth $220 million during the first half of 2004, MIC says.

That's up twenty-fold from shipments of close to 50,000 units worth $14 million during the same period last year, MIC says.

By comparison, Taiwanese companies shipped 700,000 DVD recorders worth $140 million during the second half of last year, MIC says.

Looking ahead, Taiwanese companies could ship up to 2 million DVD recorders during the second half of this year, bringing the total number of DVD recorders shipped this year to 3 million units, MIC says.

Shipments of DVD recorders from Taiwanese companies have been boosted by growing sales in the North American and European markets and reflects an improved ability of Taiwanese companies to source key components, MIC says.

Supply and Demand
MIC says a drop in the price of key components, including DVD loaders and MPEG-2 decoder chips, will cause the average selling price of DVD recorders to fall by nearly 50 percent during the second half of this year. Combined with consumer interest in global sporting events, such as the 2004 Olympic Games in Athens, this price drop will spur demand higher for DVD recorders, it says.

Based on MIC's numbers for the shipments and value of Taiwanese-made DVD recorders, the average selling price for Taiwanese-made recorders was approximately $220 during the first half of the year. That represents a reduction of 22 percent compared with an average selling price of around $280 one year ago but an increase of 10 percent when compared with the average selling price of $200 during the second half of 2003.

Japanese companies are currently the world's largest producer of DVD recorders, accounting for around 50 percent of shipments during 2003, MIC says. European companies accounted for 10 percent of shipments while South Korean and Chinese companies each accounted for between 6 percent to 8 percent of shipments last year.

MIC did not specify what percentage of shipments came from Taiwanese companies, but says Taiwanese companies could account for 25 percent of shipments in 2004, making them the second-largest supplier of DVD recorders.

Story source: pcworld.com.