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Tuesday, December 21, 1999
New Report Examines Factors Behind CD-RW Growth

"..As consumers look for an inexpensive choice in removable storage, the worldwide compact disc-rewritable (CD-RW) market is forecast to grow from 11.3 million shipments this year to 23 million in 2000, according to Dataquest Inc. Dataquest analysts said CD-RW began a surge of growth in 1998, when shipments grew to 3.447 million, a 456 percent increase over the 620,000 units shipped in 1997. They believe the CD-RW market is growing because of competitive pricing.

"As prices continue to decline, these products will become even more appealing to consumers,"' said Mary Craig, principal analyst for Dataquest's Optical Disk Drives Worldwide program. "The most popular CD-RW drive application is the recording of music on inexpensive CD-R media, which costs under one dollar, and the price of CD-RW media is now around two dollars. This makes CD-RW a more attractive alternative to other removable storage media, which costs seven to nine dollars for high-capacity floppy disks with about four to five times less capacity than CD-RW discs."

Dataquest analysts believe that part of the initial success of CD-RW can be attributed to Hewlett-Packard when it broke the $1,000 price barrier for CD-R drives in 1996. Another factor for CD-RW's success is that user demand for DVD-ROM has been soft.

"The CD-RW market will continue to grow as long as there are multiple rewritable DVD formats,'' said Mrs. Craig. ``The fact that several formats exist for rewritable DVD means that incompatibilities exist, which ultimately thwarts mass-market acceptance. Discussions are taking place to attempt to resolve these incompatibilities, but this will add cost to a drive that was initially meant to be the low-cost, high-capacity replacement of CD-ROM.''

Additional information on this market is available in the Dataquest Perspective "CD-RW-The Dark Horse". The Perspective examines the CD-RW market and presents the reasons Dataquest is predicting that optical drive products will be the dominant high-capacity rewritable removable storage device on PCs by the end of the next decade.."

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