Mixed bag for optical drive sales

Posted on October 01, 1999

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Mixed bag for optical drive sales

Zachary Shess

As the optical market begins a new millenium, the fortunes of CD and DVD formats will be moving in distinctly different directions, according to a report from Disk/Trend Inc., a storage market research firm in Mountain View, CA.

Perhaps the starkest contrast is between CD-ROM and DVD-ROM formats. In 1998, nearly $4.3 billion in CD-ROM drives were shipped, compared to just $650 million generated from DVD-ROM drive sales. However, forecasts through 2002 show reversals. CD-ROM drive revenues are expected to fall to $3.52 billion in 1999 and to just $803 million in 2002.

Conversely, DVD-ROM sales are expected to nearly double to $1.2 billion this year and to exceed $4.2 billion in 2002. DVD-ROM`s anticipated rise in popularity will result from the same declining prices and performance increases that fueled the CD-ROM industry.

Throughout 1998 and 1999, CD-RW continued to maintain the highest growth rate among all types of optical drives. While declining prices proved significant in CD-RW`s emergence, in-creased availability and the hesitation to buy rewritable DVD because of standards battles have also been formidable factors, says Disk/Trend president Jim Porter.

"The principal CD-RW drive producers--Philips and Sony--really brought prices down and made CD-RW capable of reading read-only discs, so CD-RW could take over the old CD-R area," Porter says.

Capitalizing on the popularity, Porter says about 10 new companies in the Far East started producing CD-RW drives this year. By 2002, he expects CD-RW to cool off as rewritable DVD standards are finally ironed out.


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