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Uphill battle for portable video

Sure, watching movies on a mobile gadget might be fun. But is the privilege worth $600?

TAIPEI--Taiwan's hardware companies happily cashed in on the boom in digital music players created by Apple Computer's iPod, but what seems the next logical step--portable video--may be an idea ahead of its time.

Analysts say it is easier to persuade customers to shell out $400 to $800 on a fancy mobile phone with PDA and media player functions than to tempt them to pay a similar price and watch movies on a screen the size of a business card.

Using the devices also requires customers to convert content into a dizzying array of formats--a prospect that can discourage all but the most hard-core of techies.

Computex photos

Taiwan's Kinpo Electronics saw plenty of interest but few sales for its portable video player, which has a 40GB hard drive, at the Computex computer trade show in Taiwan, said saleswoman Kathy Lin, who was tending the company booth.

"Many people have come to ask about it, but actual orders are very few," Lin said. "Prices are high, so buying interest is a little weaker."

In Taiwan, gadgets like Kinpo's player retail for up to about $575 (18,000 Taiwan dollars).

For just slightly more, consumers could get a combination PDA and phone from Taiwan's High Tech Computer, or HTC, whose booming sales have made it one of Taiwan's hottest stocks this year.

HTC's gadget too, plays MP3 audio and digital video, but it also sports a built-in camera and Bluetooth wireless connection, lacking only the massive storage capacity of hard drives that most personal media players need to play programs taking up hundreds of megabytes of data.

Research company IDC says the personal media player represents the next step in the evolution of portable entertainment but that demand is questionable.

"In addition to a hefty price tag, PMPs are also competing with a host of other converged devices such as the new Photo iPod, cell phones, new handheld gaming decks and portable DVD players," IDC said in a recent report.

"In the future, portable video players will remain a wild card, given unproven demand and the very early stages of commercial digital video services," it said.

Other mobile devices, like PDA phones and smart phones, are of much more interest in the near term to major companies like motherboard maker Asustek Computer and BenQ, which could easily enter the video market if they felt demand were there, said Deutsche Securities analyst K.C. Kao.

"The phone is a mass market; they are the mainstream," Kao said in a research note. "(Taiwan companies) would rather allocate resources to make PDA phones or smart phones."


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HTC itself has no announced plans to boost its video offerings, and is banking on a hot new product to power the second half of the year--a phone shaped like a tiny palm-size laptop computer that is one of the first to allow high-speed Web surfing using third-generation, or 3G, wireless technology.

"The overall market response is very positive; we're very excited," HTC President Peter Chou told Reuters in a recent interview. "People like this device."

Story Copyright © 2005 Reuters Limited. All rights reserved.