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DVD recorders create stir, but sales may be slow
By Lucas van Grinsven

BERLIN, Aug 25 (Reuters) - No product at Europe's top consumer electronics show has created such a stir as the digital versatile disc (DVD) recorder, but punters doubt they will sell by the truckload.

At 2,000 euros ($1,828) apiece, DVD recorders may burn perfect digital copies of TV films and family footage on a silver disc the size of a CD, but they will still have to compete with alternatives 10 times cheaper.

"The DVD recorder won't be a killer; 2,000 euros is out of reach for the consumer who can do the same thing on a VCR for 200 euros. Who's able to see the difference?" said Helmut Engel, president Sharp Electronics Europe, a unit of Japan's Sharp .

Others visiting the bi-annual Internationale Funkausstellung (IFA) here are also sceptical.

"A DVD recorder is so expensive. Who's going to buy them? So far we've sold only a few thousand worldwide. Mainly in the U.S.," Daeje Chin, chief executive of Samsung Digital Media , told Reuters.

"I don't believe it is mass market product. Rather it's a niche market," said Pierre Mureau, vice president of consumer woldwide marketing at France's Thomson Multimedia .

DVD recorders, either standalone or as part of a personal computer, can record between one to four hours of moving images on a single disc. The machines come with software that can edit a holiday movie into a three minute video clip.

 

DIFFERENT STANDARDS

Another factor slowing down market acceptance is lack of a single standard.

Matsushita's Panasonic launched its DVD RAM recorder last year, Pioneer introduced its DVD-RW recorder and this year's IFA brings a DVD+RW recorder from Netherlands-based Philips .

Companies such as Japan's Sony and Samsung are so unhappy with this situation, they are developing machines that combine several standards.

However, representatives of both companies said their integrated products would not be out before the second half of 2002, adding that the existence of two technologies was not going to make the recorders any cheaper.

At 2,000 euros a box, DVD recorders are about twice as expensive as DVD players when they were first introduced in 1997.

Manufacturers point out that DVD players dropped below 250 euros only four years later, and hope similar price erosion as a result of cheaper technology and scale economies will soon bring the digital disk recorder within reach of the masses.

Price drops have already made DVD players a mainstream product, with 100 million machines expected to be installed worldwide by the end of 2002, said Sony's Toru Takeda.

This success, which has made the DVD player into a mass market item faster than any other product in the history of consumer electronics, has drawn attention to the standards battle.

Both -RW and +RW recorders can play existing DVDs, and discs recorded on either machine can be played back on any DVD player.

The only real difference is that a blank +RW disc does not work in -RW recorder and vice versa.

"Everyone keeps nagging about the standards. But a lot of work has been done. The differences aren't so big any more," said one industry source.

However, Panasonic's DVD RAM standard is not as compatible as the other two, and Samsung, which has a DVD RAM recorder on the market, also wants to include DVD-RW and DVD+RW in a single recorder.

Regardless which standard prevails, there are industry players who have no doubt that DVD recorder will become a fact of life and will wipe good old VCRs from the face of the earth.

"The market for VCRs already fell by 20 percent last year. In five to 10 years it will disappear completely," said Peter Korsgen, director Consumer Business for Sony Germany.




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