The DVD player is the fastest-selling product in consumer-electronics history, with part of its popularity stemming from low prices. In hopes of repeating history, the semiconductor division of Philips announced Tuesday that it will license a new reference design for a DVD+RW player geared toward second-tier manufacturers.
DVD players are limited to playing DVDs, whereas DVD+RW players let people record and re-record data onto DVD+RW discs. Being newer, DVD+RW players are still more expensive than their less-sophisticated brethren, costing more than $500 versus about $100.
The Philips move "helps to bring volumes and additional players to the market, which will help to drive mainstream pricing," said Danielle Levitas, an analyst with research firm IDC.
The move also helps shore up support for the DVD+RW format in the consumer-electronics market, Levitas said. Two groups of companies--the DVD Forum and the DVD+RW Alliance--areto establish a DVD recordable/rewritable standard. Philips is part of the DVD+RW Alliance. The DVD Forum advocates the DVD-RW, DVD-RW and DVD-RAM formats, while the DVD+RW Alliance promotes the DVD+RW format.
"On the PC side, there are a number of +RW supporters, but on the (consumer-electronics) side not so much," Levitas said.
Philips is trying to change that by licensing its reference design. The company has set a goal to have five customers at the Consumer Electronics Show in January. The design is currently available to select customers, and Philips expects to be producing large volumes of units by the second quarter of 2003. Philips hopes to gradually lower the price of DVD recorders to $250 by 2005.
"We have found that retailers often want one or two A brands and one or two B brands to target different price points and a larger audience," said Jeroen Keunen, a general manager with Philips.
Some of those B brands include Apex and Mintek among others.
The reference design includes the entire device, down to the cables and the remote control, Keunen said, so potential manufacturing customers would need only to brand the devices.
One challenge Philips will face in attracting manufacturers will be recognition, Levitas said.
"The biggest issue will be getting in the door, since Philips hasn't been a big supplier to B brands in the past."