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Who will win the DVD standards fight?

In a chapter taken out of the videotape wars of the 1980s, the DVD standards standoff could leave consumers once again holding useless chunks of plastic.

Wrangling over standards threatens to stall the adoption of DVD rewritable drives, even as peripheral manufacturers prepare new products for market.

In a chapter taken out of the videotape wars of the 1980s, where major electronics companies lined up behind either VHS or Beta, the standards standoff could leave consumers once again holding useless chunks of plastic.

The players are strikingly similar. Beta backers Sony and Philips support one standard, DVD+RW, and VHS victors Hitachi, Panasonic, and Toshiba support the other, DVD-RAM.

Currently, CD rewriting technology--and

DVD rewritable gaining ground
The technology for creating your own DVD disks will slowly close the gap with the more dominant CD method.
1998 120,000 4.1 M
1999 545,000 10.5 M
2000 1.5 M 17.3 M
2001 2.8 M 22.6 M
Source: Disk Trend
other storage options like Zip drives--are far more dominant in the market.

"Do you want to bet on the guys who did VHS or the guys who did Beta?" asked Jim Porter, president of Disk Trend. "We see the same foolishness being repeated over and over again here and the inability to sit down in a smoke-filled room and agree what a single standard should be."

DVD+RW writes disks that most DVD drives and players can read. DVD-RAM, on the other hand, stores optical disks in caddies that won't work in older DVD devices. DVD rewritable's main advantage over the more popular CD rewritable is capacity, 4.7GB versus 640MB.

But neither standard has achieved that capacity, stuck in the 3GB range. Both camps pledge support for 4.7GB by next year. But Mike Mihalik, vice president of engineering for LaCie said to expect larger-capacity drives sooner.

The differences between the DVD rewritable standards are subtle, "and have more to do with who holds the patents," said Wolfgang Schlichting, analyst with International Data Corporation. "The similarities are much more than the differences."

This is a crucial point for buyers, who could still continue to use a product if the other standard wins out. Although there would be no write compatibility, DVD+RW and DVD-RAM drives would eventually be able to read disks created using a different standard.

DVD-RAM beat DVD+RW to market by more than a year, giving it quite a head start. Philips is expected to ship its first DVD+RW drive next month for about $700.

"First to market is not trivial," said Ted Pine, analyst with InfoTech. "They've had product out there for more than a year. They've had a lot more time to shake down their technology."

DVD-RAM also got a boost from Apple Computer, which offers an internal DVD-RAM drive as an option on build-to-order PowerMac G3s. PC companies, such as Dell Computer and Micron instead offer CD rewritable drives.

But these advantages are tenuous at best, said other analysts, because the market is so small.

Disk Trend estimated peripheral manufacturers sold 120,000 DVD rewritable drives last year and an expected 545,000 this year. Going forward, Disk Trend expects 1.5 million drives to be sold in 2000, 2.7 million in 2001, and 7.3 million 2002.

The boom now is CD rewritable, according to Disk Trend, with 4.1 million drives sold in 1998 and 10.5 estimated for this year. Projections are 17.3 million, in 2000, 22.6 in 2001, and 22.5 in 2002. CD rewritable sales are expected to flatten in three years as momentum picks up behind DVD rewritable.

"It looks like it will take that amount of time for all the usual players to get into production at 4.7GB and for the prices to come down dramatically," said Porter. "Hopefully by that time we'll see some daylight in terms of standardization."

Storage products typically take off when prices fall to a point attractive to consumers and enough people buy the devices to make compatibility attractive.

But DVD rewritable faces another handicap, the slower-than-expected adoption of DVD. Pine said until DVD is a standard option on PCs, the devices will not really take off. "Go out there and find me a sub-$1,000 PC that has a DVD-ROM as standard equipment. That's 50 percent of the market."

InfoTech estimated about 12 million DVD ROM drives would be sold this year, but the devices are not expected to reach critical mass until late next year when interactive DVD games from Sony and others hit the market.

That is also when the first consumer electronic devices supporting DVD-RAM are expected to hit the market. Compatibility has been the platform's biggest shortcoming. Many newer, 5X or above, DVD drives can read DVD-RAM disks, but most older models cannot. CD rewritable went through a similar conversion after its introduction in 1997. Initially, few drives could read CD-rewritable-created CDs.

Analysts would not speculate which standard would dominate, but Sony's success in the consumer electronics and gaming space is expected to give DVD+RW a push next year.

Schlichting sees something else that could give one standard the edge over the other.

"What will make the real difference will be the ability to write CD media. This will be a key functionality for increasing acceptance for either of these rewritable DVD formats."