The threat of being overtaken by Chinese manufacturers was what pushed 10 electronics giants to agree to create a common standard for next-generation recordable DVDs, analysts say. The Japanese, Korean and European manufacturers agreed on Feb. 15 to set this standard for the discs and their recorders, aiming to commercialize the technology as early as 2003.
Chinese firms are already beating out foreign rivals in the DVD player market and will soon catch up in DVD recorders. To take a lead, the 10 firms believe that they need to quickly popularize next-generation DVDs and DVD recorders -- and that a common standard is essential to doing so.
The lack of such a standard is hampering the spread of current DVD recorders.
Japanese manufacturers have especially been hurt by Chinese firms' releasing low-cost DVD players priced at less than 100 dollars, about half as much as conventional models. And DVD recorder sales are failing to meet expectations due to the inconvenience of having three incompatible standards on the market.
Until now, next-generation DVD recorders had been developed separately by three groups: Matsushita Electric Industrial Co. Ltd. and Toshiba Corp.; Sharp Corp. and Pioneer Corp.; and Sony Corp. and Dutch giant Royal Philips Electronics.
Insiders say Matsushita -- which expects to post a whopping 265 billion yen group net loss for this fiscal year and was most intimidated by Chinese rivals -- approached Sony about a common standard for next-generation models. Manufacturers expect the standard to boost global use of DVD recorders. (132.01 yen = US$1)