DVD to encroach on CD-ROM territory

Posted on October 01, 1997

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DVD to encroach on CD-ROM territory

DVD`s been a long time coming, and is still plagued by incompatibility issues, but the DVD-ROM version is now poised to make a run at the market dominated by CD-ROM technology.

According to a report from Disk/Trend Inc., a storage market research firm in Mountain View, CA, shipments of CD-ROM drives are expected to top 66 million this year. Shipments of CD-R and CD-RW drives will slightly exceed 2 million units this year, while DVD-ROM drives begin their ramp with 500,000 drive shipments.

The big question for DVD has been when the technology will finally take hold in both the home and corporate markets. Critical mass may not come until the end of the century. Disk/Trend expects CD-ROM shipments to begin declining in 1999, with DVD-ROM starting to outsell CD-ROM in the year 2000 time frame. By then, total optical drive shipments should top 100 million units, representing revenues of more than $10 billion.

Although DVD-ROM will represent the lion`s share of DVD shipments for the foreseeable future, a handful of manufacturers have already announced--or have begun limited shipments of--2.6 GB-per-side DVD-RAM drives, including Hitachi, Matsushita (the revenue leader in optical drives), and Toshiba. Prototypes of a 4.7 GB version are due by the end of next year.

However, the DVD-RAM market may be marred by incompatible standards. The DVD Forum--comprised of 10 companies, including Hitachi, Matsushita, and Toshiba--have settled on a standard format that will be submitted to standards bodies such as the European Computer Manufacturers Association (ECMA) and the International Standards Organization (ISO). But Sony is developing an incompatible format, with a 3 GB capacity, that the consumer giant says is more compatible with the DVD-ROM format. Sony`s format is backed by Hewlett-Packard (the leader in optical jukebox shipments) and Philips Electronics.

The potential standards skirmish is reminiscent of the VCR wars of yesteryear. "It looks like there`s going to be another fist fight over standards," says Robert Katzive, an analyst with Disk/Trend.

Originally published on .

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