DVD players are one of the most successful consumer electronics products of all time, and the DVD market has seen unprecedented growth since their debut in 1997.

Largely driven by rapidly falling component prices, DVD playback has been integrated into a wide array of consumer electronics devices. According to a new report from IDC, this trend will continue with DVD recording functionality during the 2002 to 2007 forecast period. DVD recording will be a fundamental driver of the DVD market as the average selling price of DVD recorders falls from $699 in 2002 to $126 in 2007, and dual playback and recording functionality quickly become the default feature set of DVD players, just as they have been for VCRs.

"The DVD market will continue to exhibit strong growth through 2006, driven by falling costs, diverse form factors, and widespread adoption of DVD recorders by consumers," said Susan Kevorkian, senior analyst with IDC's Consumer Devices and Technologies program. "However, the market will not sustain this kind of growth indefinitely. In 2007, IDC expects total DVD player unit shipments to decline modestly for the first time due to growing saturation worldwide."

According to IDC's market forecast, worldwide shipments of DVD recorder decks will surpass DVD play-only decks in 2007, with DVD recorder deck revenues surging ahead of play-only deck revenues in 2005. As prices fall, DVD recording functionality will also be integrated into more and more device form factors, including combo DVD players and home theater in-a-box (HTiB) with DVD. Although the growth prospects for specific categories will vary, IDC expects worldwide unit shipments of recorder decks to grow at a 126% compound annual growth rate during the forecast period.

Other market accelerators through 2006 will include the integration of innovative features sets, such as hard drive-based digital video recording (DVR), DVD-Audio and SACD support, and home networking technology. While the market for high definition (HD) DVD recording devices is also expected to grow modestly both worldwide and in the U.S. during the forecast period, a number of barriers to widespread adoption must be overcome.

"Retail prices are falling rapidly across every DVD player category," Kevorkian added. "To succeed in this environment and insulate revenues, consumer electronics manufacturers must differentiate their products by offering unique features sets and form factors while promoting fair use of content by consumers."

The IDC study, Worldwide and U.S. DVD Player Forecast and Analysis, 2002-2007: Video and Beyond (IDC #30105), provides a forecast and analysis of the worldwide and U.S. DVD markets. It also reviews recent market trends and consumer survey data from IDC's annual Consumer Devices and Technologies Survey. Market categories covered in the report include DVD play-only decks, recorder decks, portable, combination, home theater in-a-box with DVD, DVD shelf systems, and automotive DVD devices. This forecast also breaks out DVD recorders by other form factors, namely combo and HTiB, as well as high definition DVD players. The report also includes unit shipments and revenue for DVD-enabled videogame consoles, but does not consider PC DVD drives.