The world's 10 leading electronics companies have reached agreement to standardize their recordable digital video disc (DVD) devices. The 10 electronics leaders are Matsushita Electric Industrial Co., Ltd., Sony Corp., Toshiba Corp., Hitachi Ltd., Sharp Corp., Pioneer Corp., Royal Philips Electronics NV, France's Thomson Multimedia Group, Samsung Electronics Co., Ltd. and LG Electronics Inc.
They are slated to make public the basic standard in the week and start the concerted effort by forming a joint technology development team for launching the new DVD disc and drive in 2003. The agreement was prompted by the need to fend off fledgling Chinese competitors, which are rapidly catching up with the global leaders.
New DVD discs will hold around six times as much information as existing discs, which hold a minimum of 4.7GB, enough for a full-length movie. The development of standardized DVD-R players should enhance the popularity of advanced products, by enabling video data recorded by one DVD-R device to be recognized by other types of DVD-R device.
The display of video on DVD disc is unified, but data can be recorded in three different ways, in accordance with the three different standards respectively supported by Matsushita Electric and Toshiba, Pioneer and Sharp, and Sony and Philips. Videos recorded by Matsushita's DVD-R, for example, will not be recognized by a Sony machine. This confusing incompatibility has been the main reason for the low popularity of recordable DVD drives.
At present, the market for display-only DVD drives has reached 1.58 million sets in Japan, doubling that two years ago, but the DVD-R market accounts for only 131,000 sets.
So far, DVD drive makers have been developing high-density DVD displays separately. However, recognizing the threat from Chinese competitors, the 10 leading electronics companies now believe it has become vital to standardize their various modules, if they want to maintain the dominance of their DVD products.
In order to standardize the DVD modules, thereby enhancing the convenience in use, and unify the necessary components with a view to lowering manufacturing costs, they have eventually decided to team up rather than persist in wasteful competition.
Responding to the upcoming conciliation between the 10 leaders, Taiwan's DVD companies said they would have to watch the outcome of this initiative, but will continue the tie-up with Chinese alliances to jointly promote new standards. Several local DVD makers think it will be difficult for the 10 leaders to unify their standards and commercialize the products next year. Ritek Corp. said it would continue to develop various kinds of modules, as the market remained uncertain. The company said that early success for the unified standard could not be taken for granted, because not only the promotion but also the users' existing preferences would affect the standardization change.
Taiwan has seized over 80 percent of the world's compact disc market, but won low position in leading the product standards.
In order to compete for lead in standardization, thereby reducing the chance of being accused of patent infringements, local CD-R companies have been angling for cooperation with Chinese companies in hope of jointly setting the new standard aimed at the greater China area.