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Wednesday, October 23, 2002
Philips looks to spur recordable DVD player production

Philips Semiconductors hopes to ignite production of DVD players featuring its write-once, rewriteable format by releasing a reference design that will help manufacturers build DVD+R/DVD+RW recorders in time for the Consumer Electronics Show to be held in Las Vegas next January.

Philips said it is pitching its reference design to system OEMs Hong Kong, China, Taiwan and Turkey in hopes of triggering volume production of DVD+RW systems to make them cost effective replacements for VCRs in time for Christmas 2003.

Jeroen Keunen, the head of consumer and multimedia at Philips Semiconductors in Asia-Pacific, called the reference design "a complete manufacturing kit" that should allow OEMs to build a DVD+RW recorder priced at $500.

Philips Semiconductors is gambling that the DVD+RW format will succeed, though the battle of recordable DVD formats remains unsettled on the global market. Chief executive officer Scott McGregor stated his commitment to DVD+RW in a recent interview: "The war isn't over, but we know who is going to win," McGregor said.

Philips Semiconductors decided two and a half years ago to pursue the market for recordable DVD players rather than playback-only systems, Keunen said. The company believes it will solidify the position of DVD+R/DVD+RW by strictly focusing its software development efforts on the format.

The company's reference design consists of a digital board that holds Philips Semiconductors' pnx7100 MPEG-2 audio/video and graphics codec and its VAE8020 optical recorder engine; and an analog board equipped with a power supply, tuner, and other functions. The reference design comes with a complete DVD+RW software stack designed to run on top of the pnx7100. The software stack guarantees a system's compliance to the DVD+R/DVD+RW standard, the company said. Philips Semiconductors will also provide custom software to customers if necessary.

Despite diverging DVD formats that could fragment the market, research firm Cahners In-Stat expects the DVD recorder market to pass one million units this year, five million units in 2004 and 25 million units in 2006, according to senior analyst Michelle Abraham.

Three competing recordable DVD formats are now at play in the market: Panasonic's DVD-RAM; Pioneer's DVD-RW; and Philips' DVD+RW. Recorders that embody the DVD+RW format increased their market share in Europe this past summer to as large as 88 percent, said Keunen, quoting statistics from GfK Group, a German market research firm.

Thus far, Philips Consumer Electronics is the only system vendor selling DVD+RW recorders to the consumer market. Philips Semiconductors said it expects Thomson Multimedia and Sony Corp. to follow suit.

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