Peripherals Special: Optical Disk Drives

Optical growth heading the read write way

Optical Disk Drives (ODDs) have now become omnipresent as they are shipped with almost every PC today. With PC sales crossing the one million mark in the first half of fiscal 2003, ODD players are gung ho on sales prospects. Srikanth R P reports

DVDs are predominantly used for entertainment in India. Sales of DVD drives would go up when they are used for storage too, says R Manikandan

After a spectacular year that had almost all sectors registering bullish growth rates, the feel good factor is continuing in the current year too. Recently, MAIT announced that PC sales for the first half of the fiscal year ending September 2003 crossed 1.25 million units, registering a growth rate of 32 percent over the same period last year. This is significant as this is the first time that sales in the first half crossed the one million mark.

With ODDs shipped with every PC today, combined with the fact that the average user replaces his ODD at least once during the life cycle of a PC—branded players like Samsung, LG and BenQ are naturally optimistic on the growth prospects of the ODD segment in India.

While previously CDs were used only for distributing software packages—the increasing popularity of ODDs, combined with the price advantage compared to other options, have meant that today CDs are increasingly being used for back-up of data. The rising popularity of ODDs can also be seen from the number of MNC vendors and the wide range of product offerings. Currently, CD-ROM drives still hog the lion’s share of the market, followed by CD-RW and DVD drives. But with the falling prices of CD-Writers, vendors expect CD-Writers to eat into the market share of CD-ROMs.

Says R Manikandan, DGM, Sales and Marketing (IT products), L G Electronics India, “The market is steadily moving towards acceptance of CD-RWs. In the SOHO segment, CD-RWs are mainly used for storage and entertainment purposes, while the SME segment perceives good utility value from CD-RWs.” With prices of CD writers falling to around Rs 2,200, more home users are comfortable buying a CD-Writer as compared to a CD-ROM drive.

Says Ashish Gupta, product manager, Optical Media Solutions group, Samsung, “India in 2004 would be mirroring the global trend with 65-70 percent of the market comprising the recordable segment and 30 percent falling in the readable segment, thanks to the fall in CD-Writer prices.”

One interesting point to note is the fact that the SOHO and the SME segment will be driving growth for CD-RWs. This is because, in the corporate segment, the concept of shared resources and a networked environment eliminates large scale usage.

Adds Ashish Bakshi, country head, India Operations, BenQ, “Consumption of CD-R media in India is already witnessing a quantum growth. This includes audio CDs, video CDs, CD-ROMs for software, magazines, corporate use and games.” On the CD-Writer speed front, the market has standardised and is moving towards 52X over 48X.

To create a differentiation between other vendors and itself, Samsung has recently introduced a new CD-ROM drive in India called the speed adjustment technology or SAT ROM drive. Samsung has patented this technology and is optimistic that this drive will give the company an edge over other vendors. SAT is a proprietary Samsung technology that makes the CD-ROM drive work intelligently as per the quality of media being used. Unlike other drives that read a CD-ROM according to the speed of the drive, the SAT ROM drive automatically adjusts the read speed of the drive according to the media inserted. Samsung claims that this drive will give users more readability and lesser chances for errors. The drive has been developed keeping in mind markets like India and China where both organised and unorganised players exist, and where quality of media ranges from excellent to average or even poor. And hence, a specialised drive that adjusts reading speed according to the media type used will result in lesser read errors.

Combo drives

Besides CD-ROM drives and CD-Writers, combo drives are seeing reasonable growth. Despite the obvious advantages, combo drives have not picked up in India as awareness is still low. “Combo drives have not become the entry-level drive. Unlike the channel industry, this trend would be driven by the consumer, ” says Ashish Gupta of Samsung. But Gupta like other vendors believes that the market will see an increase in the deployment of combo drives as the prices of combo drives are falling rapidly.

India has the potential of emerging as the world’s largest market for DVD drives, says Ashish Bakshi

DVD drives

While the potential is huge, DVD drives have not yet caught the fancy of the Indian consumer due to lack of media titles in the DVD segment. Additionally, the cost of DVD-ROMs are also very high, which makes it prohibitive for users to adopt this media.

“In a price conscious market like India the high price of the DVD is a big inhibitor in the growth of the market. Moreover, DVDs are predominantly used for entertainment in India. Other applications like storage have not yet picked up due to the high cost of the medium. The day DVD drives are used for storage, the market will surely pick up,” says Manikandan of LG. But with falling prices and the obvious advantage of enhanced storage capacity over CD-ROMs, vendors are optimistic that this segment too will see growth. As India is a movie and music crazy country, vendors are bullish on the potential of DVD drives as a medium.

Agrees Ashish Bakshi of BenQ, “In terms of DVDs, a recent ‘Replication Asia’ event stated that India has the potential for emerging as the world’s largest market for DVDs. It is ultimately the depth of the Indian market in content—both music and movies—that will have its inevitable effect. India is not yet a games market, but this segment too is quite important in other Asian markets and is a major area of opportunity in India.”

Thanks to the fall in prices of CD-Writers, India in 2004 might mirror the global trend, where 65-70 percent of ODDs fall into the recordable segment and 30 percent fall in the readable segment, says Ashish Gupta

Summary

Market players expect CD- Writers to eat into the market share of CD-ROM drives. Channel players say that CD ROM drives are on the decline while CD-Writers are showing growth rates in the range of 35-40 percent. Niche segments like combo drives and DVD drives are growing in the range of 15-20 percent. But vendors are still optimistic and hope to grow this nascent market by launching new products. Almost all the vendors Express Computer spoke to said that they were considering launching high speed versions of DVD-Writers in the current fiscal.

srikanth@expresscomputeronline.com