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Tuesday, December 06, 2005
LiteOn Ready For Next-gen DVD Formats

In an interview with Mr Jelmer Veldman, Marketing Supervisor of LiteOn IT Europe, we had the chance to talk about LiteOn's current position at the market and the company's plans regarding the next-generation DVD technologies.

Lite-On is a Taiwanese-based company, covering the field of Digital Convergence. Mr Jelmer Veldman works for Lite-On IT, which is a 100% subsidiary of Lite-On Group. Lite-On IT was officially established in 1999 to fully concentrate on the booming optical storage market. Since then, the company has grown to become one of the world's leading manufacturers of optical disc drives. Mr Veldam is a marketing supervisor, and coordinates new product launches, PR activities, exhibitions and advertising across Europe.

CDRInfo: Where do Lite-On's strengths and weaknesses lie?

One of our biggest strengths is that we can produce innovative and high quality products in an economic scale that we bring to the market at a reasonable price. Another strength we have is our distribution channel. In Europe we established a big network of distributors.

Our biggest weakness is our brand awareness on consumer level. Our production is for 70% focused on OEM business. The other 30% ends up on the market under the Lite-On brand, but not all in retail of course. Unlike other brands in the industry we don?t have a very wide product range under our brand on the market, which makes it more difficult to increase our brand awareness.

CDRinfo: What milestones have you set for this year and have they been fulfilled to date?

Recognizing the convergence in the industry we started a Digital Consumer business unit back in 2002. The first products that were released to the market from this business unit were our DVD recorders. The year 2005 was an important year for us, because the market of HDD/DVD recorders was growing. Our LVW-5045, a DVD recorder with 160GB hard disc, was received well by both press and consumers. We position our DVD recorders the same as we do with our optical drives: high quality products for a reasonable price. Another focus for our HDD/DVD recorder is that we want them to be very easy to use for people. The development of our greatly appreciated Easy Guider user-interface is also something we are proud of. Lot?s of magazines gave this product Best Buy awards, which we consider a big compliment and a confirmation of our proposition to offer an affordable alternative to the market.

CDRInfo: We will talk about optical storage devices in a while, but before we do so, lets talk a little bit about Lite-On's involvement in other areas. For example, you have products dealing with communications, digital cameras and mp3 players, PDAs and projectors, as well as PCs and associated peripherals. How much do you manufacture yourself, how much do you have manufactured for Lite-On by other manufacturers, and how much do you OEM?

Lite-On IT only produces optical drives and HDD/DVD recorders. Unfortunately I can?t give you information regarding all other products Lite-On is producing.

CDRInfo: What would you say are your best products and why?

The best product in my opinion is the product that offers the best value for money for the consumer. In that case I consider our LVW-5045 HDD/DVD recorder as a very good product. The feedback we got on that product was very positive: high performance, very easy to use, and a friendly price.

Within our optical storage product range we just introduced a new external drive with our patented EZ-DUB feature. This feature makes it possible to back up files or copy a disk by pushing only one button. With this product we aim at a new market segment: people who are looking for an easy solution to copy discs or back-up files.

CDRInfo: What products or areas do you see providing the greatest changes and advancements, both immediate and in the future?

The IT industry changes all the time. Product life cycles are getting shorter, new technologies are emerging everywhere and there?s a big convergence going on between ICT and CE. In the optical business you see that now writing speeds have reached their physical limit at 16X (although small speed increases are possible), vendors are looking for other features to differentiate their products. To add LightScribe is a good example. For us, the introduction of the EZ-DUB feature is a way to differentiate our external drives. In the future we?ll have to see what will happen between Blu-Ray and HD-DVD. A lot of things have been said regarding this subject already. We are preparing ourselves for all possibilities.

CDRInfo: LiteOn has been using MediaTek chips for its ODDs. Are you planning to cooperate with any other silicon manufacturer in the near future?

In our European office we are not involved in the decision making process when it comes to chip suppliers. These subjects are discussed at our Asian locations.

CDRInfo: Lately, most of the ODD hardware makers have announced the launch of new DVD recorders that support DVD-RAM recording. What is your opinion on the DVD-RAM format and does LiteOn has any plans to relese a DVD-RAM drive?

The DVD-RAM format has never been very popular in Europe, but more and more vendors implement it in their drives. The main reason for that is what I said earlier: manufacturers are looking for different features to differentiate their products from others. I think, because there are no big costs involved, that most manufacturers will make their drives DVD-RAM compatible as well. We are ready to ship DVD-RAM compatible drives to the market from December. We refer to these new drives as ?Super AllWrite?, they (re-)write on all popular formats. We used the term AllWrite before in our HDD + DVD recorder series.

CDRInfo: LightScribe and LabelFlash disc labeling technologies are already in the market. Do you believe that these features will attract consumers?

Yes, I think there is a potential for technologies like these. LightScribe wa introduced in the beginning of 2005. The start was a bit slow because in the beginning only HP had the drives and the media was quite rare. Now you see that more companies are introducing LightScribe. We launched our first LightScribe drive this month as well. But now the price differences for both drives and media will get smaller, and the second generation of media looks quite fresh. Also labeling speed is increasing. All signs that the technology is getting more mature. LightScribe is very nice for people who want to share their CDs of DVDs, give it a personal touch. And of course it looks very professional for small companies.

CDRinfo: What global regions represent the biggest markets for Lite-On optical products at the moment, and which regions do you see as being potentially big?

I can only look at Europe. We have established a respectable position in most Western European countries. In Eastern Europe it?s sometimes more difficult to penetrate the market with a brand that?s relatively unknown on the consumer level. But we have established a good distribution network there as well, so we expect we can grow in these markets as well.

CDRinfo: One of the big concerns with most users of optical storage devices is quality. Can you provide us with some insight as to how you monitor and control the quality of your optical storage devices?

Quality is very important to us. As I said, most of our production is for OEM customers. They require very high quality standards for products that will carry their brand name. If we couldn?t meet quality standards of A-brands, then we wouldn?t be in this business anymore. For production of our own Lite-On branded drives we have the same quality management. That?s the synergy effect you get being a big producer. We believe the quality level of our drives can compete with the top brands in the market. But with the Lite-On brand we aim at a different price segment. So eventually consumers get high quality for an affordable price.

CDRinfo: An added cost for any manufacturer is the royalties that must be paid. What are your views on this and what would you like to see change here?

Manufacturers who put a lot of resources in R&D and patent their innovations deserve to get paid royalties, but we do keep in mind that the end-user price of the products needs to be attractive.

CDRInfo: What should we expect from LiteOn in the near future?

At this moment we?re launching EZ-DUB to the market. We want to offer users an easy solution for copying a disc or backing up files, two of the most common things you do with an optical drive. With this Lite-On patented technology we take away the hassle that some people encounter when they copy a CD or DVD, or when they want to burn some pictures or other files. Through our Digital Consumer department we will introduce brand extensions, but we?ll have to wait until 2006 to see what happens.

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