According to BenQ president Sheaffer Lee, BenQ's joint venture with Royal Philips Electronics (Philips BenQ Digital Storage), will provide BenQ with a competitive advantage over other Taiwan-based ODD makers next year.
DVD writing speeds have approached their maximum speed of 16x, leaving little room for companies to gain a market advantage by increasing their drive speeds. Therefore, Lee believes that companies not burdened by excessive royalty payments will have a competitive advantage in the market. For many ODD makers, royalty payments account for as much as 20% of their total production costs, Lee added.
With Philips being a patent holder for DVD technology, BenQ does not have to worry about royalty payments. Other ODD ventures possessing their own IP (intellectual property) include Hitachi-LG Data Storage (HLDS) and Toshiba-Samsung Storage Technology (TSST). Except for BenQ, other Taiwan manufacturers will be at a disadvantage in the market next year, unless they can develop strategic partnerships with DVD IP holders, Lee said.
This year, BenQ expects to ship 24-25 million ODDs, Lee added.