1. Interview with Frank Simonis of Philips
An
Interview with Mr Frank Simonis
The
following interview was very kindly given to CDRinfo by Mr Frank Simonis, Strategic
Marketing Director, Philips Optical Storage.
Philips has been and is a technology leader. Can you give us a little background on PHILIPS, especially some of the things most people may not know about the company.
Some people may not know that our expertise is much broader than a technology
leader in consumer electronics. We are very active in medical systems, lighting,
semiconductors and domestic appliances. We have a long history in innovations,
like the audiocassette recorder and the CD. At this moment we are selling more
than 5 consumer electronics products per minute to consumers worldwide, for
which our DVD recorders and Flat TVs are among the highlights. We are leading
the industry towards the "Connected Planet" - a world where everyone can always
connect and access entertainment, information and services, independent of
location, time or device.
What are Philips' strengths and weaknesses?
Philips has strength in research and innovation of new optical storage technologies, key components like the optical pickup unit & IC chipsets and Philips has capabilities to set standards together with industry partners. To further strengthen our position in the dynamic optical storage PC markets, Philips formed last year with BenQ, a joint venture called PBDS (Philips BenQ Digital Storage) to accelerate product development and high volume manufacturing in Asia.
Have your plans so far this year gone to schedule, what were they and what can we expect for the remainder of this year?
We are very pleased that we passed all our major milestones as planned. Philips was one of the first to bring DVD+R 8x in 2003 and DVD+R DL in 2004 to the market, only a half year after our research was completed. And last month we started shipping our 16x DVD+R/+RW drive, the world's fastest DVD writer.
What does the future hold for Philips?
Philips will maintain a leading position in optical storage and is pleased to have found a solid partner in BenQ to achieve this. Partnerships are a key to survival in today's dynamic optical storage markets. The optical disc drive market shows high growth, from 200 million units in 2002 to 250 million expected in 2007. With DVD writers to become a standard feature in any PC and the Consumer Electronics (CE) DVD recorders replacing VHS tape recorders, Philips is well positioned to capture a significant share of this market. For the future, the emphasis will be on the Blu-ray Disc, which brings to the industry and consumer, a significant leap in performance. It will deliver an ultimate home entertainment experience, and provide huge capacity for archiving and back-up purposes.
Your opinion on technology in general (trends, future developments, difficulties).
You can see the trend is going from technology towards a feature/function demand. People don't care about technologies; they want technology to serve their needs. We as an industry need to listen to these consumers and think in user models and use this as a starting point for a technology pull instead of a technology push. It amazes me that some manufacturers introduce DVD camcorders on the market, pushing their technologies, when the consumer cannot play the DVD disc in a standard DVD video player or cannot append more video to that same disc if they choose the "compatibility mode". Record on DVD, playback in standard players and append is what the consumer expects, not the introduction of multi-modes that force consumers to make choices beforehand.
Philips offers a wide range of products in the home electronics consumer market. How large a share does optical storage have in this market?
For PC DVD+RW data drives, Philips plans to have production volume at 600 k units/month this fall. At that time, Philips will have a position in the top 3 manufacturers of DVD+R/+RW data drives for desktop PCs. For CE DVD+RW recorders, we have a major market share.
How does Philips differ from the competition in the optical storage market?
Philips' intention is always to be amongst the first companies bringing innovation to the DVD+R/+RW market segment. We are concentrating our efforts on meaningful innovations, based on consumer needs and wishes. For instance, from the beginning we developed DVD+RW to be compatible, easy-to-use and optimized for both the PC and CE domains. These attributes are what the consumer expects from an optical disc, and it is what we deliver.
2. Interview with Frank Simonis of Philips
Concentrating on optical storage devices, what do you have planned for the future and where do you believe the market is heading. This is especially relevant in today's market where CD and DVD media have now reached their physical limits.
Indeed the maximum speed on DVD+R at 16x has been reached; the rotational spindle speed of 10000 rpm is the physical limit for a 12 cm polycarbonate disc. However our roadmap includes improvements in (re) write speeds on DVD+RW and higher write speeds in DVD+R DL, in which we expect a speed up already by the end of this year. Next to DVD+R/+RW, we are working on the next generation of optical storage, called Blu-ray Disc. Although we expect the CD and DVD market to grow during the years to come, the next generation is aimed at playing and recording High Definition TV and video, giving the consumer a quantum leap in performance and experience.
We know that Philips has always played a pioneering role. Can you tell us what Philips has on the drawing board?
With the introduction of CD formats Philips took the leading role in setting Optical Standards. Also in the DVD timeframe, Philips with leading partners, created standards for recordable and rewritable media which had problems, setting the standard for the mass market. Today, the optical standards are making the third step in the evolution. Philips is again leading, together with the other BluRay partners, the creation of the most competitive standard based on Blue Laser technology.
Philips is committed to introducing new technologies in mass, volume applications for today's needs. This is why Philips has recently created the first important building block for the all-in-one recorder that can record and playback all the popular consumer optical formats. This compact optical pick-up unit (OPU), will be able to read and write CD-R/-RW, DVD+R(DL)/+RW and the next generation in optical storage, Blu-ray Disc (BD). The new triple writer OPU can be used for the design of IC chipsets for future data drives for the PC as well as consumer set-top box recorders. Mass production of the new OPU will start in 2006 when Philips anticipates that the mass-market demand for BD drives /recorders will pick-up (also see Q11-Q12).
Is capacity the name of the game? Is whoever comes up with the greatest capacity going to be the leader of the pack or should we be looking to other features. For example, DVD-RAM has some excellent features, especially when it comes to reliability, fault tolerance and integrity, and yet outside of Asia, it is not so popular.
To be successful in mass consumer markets, an optical recording system must fulfill three important consumer requirements:
- The basis for any recording system is data integrity, that's why the DVD+R/+RW format is robust: it has extensive error correction and defect management algorithms.
- Compatibility, the ability to record a disc and being able to play it back in the DVD player and DVD-ROM drive they already have in their household.
- Capacity and recording speed, especially in the PC world. That is why Philips developed the 8.5 GB DVD+R DL media and achieved the fastest recording speed of 16x.
The DVD+R/RW format has been created with all three elements in mind from the start, combining them into one format that has it all.
The DVD-RAM system lacks compatibility, and doesn't have the performance (write speed and capacity) that is required on the PC and therefore does not deliver the same value proposition to a user as DVD+R/+RW.
Blue Ray and HD-DVD are impressive technologies offering a giant leap forward in capacity. Firstly, your views on Blu-Ray and HD-DVD.
Today, DVD recording is extremely popular in both PC and consumer video recording applications and has grown into a mass consumer market. But we must anticipate new developments and future requirements regarding capacity and performance. With the expected rise of digital TV, consumers will want to record their high-definition content onto a high capacity 25GB (single layer) or 50GB (double layer) media. For this reason, Philips together with Dell, Hitachi, HP, LG , Mitsubishi Electric, Panasonic, Pioneer, Samsung, Sharp, Sony, TDK and Thomson created the Blu-ray Disc format as the next generation optical disc format for video recording as well as PC storage applications.
Where do you believe Blue Ray differs from HD-DVD, how is one better, where are their comparative weaknesses?
As in the evolution from CD to DVD, there needs to be a quantum leap in performance in order to be able to successfully switch to a new optical storage format. Blu-ray Disc has a higher capacity and can store 25 GB(single layer) and 50GB (double layer). This added capacity opens the way in the future for new customer features and benefits. Another difference is that today, Blu-ray Disc is supported (see pervious question) by virtual all leading CE companies, as well as the two largest PC companies, and leading media manufacturers and has endorsement from the content industry. Not in the least since Blu-ray disc is being optimized for both PC and CE use and is the most robust optical storage disc to date. High-Definition video content is expected to drive the market in this new generation of optical storage. We expect that HD movies, HD TVs and digital broadcasting will enter our households in the coming years.
Following on, obviously the CD is going to be with us for quite a while yet, as will the DVD, but with the rise in demand for the DVD format, and with projections forecasting that DVD writers will outsell CD writers, what role will each format play in the future?
Every optical storage format has is specific "killer" application that needs a specific storage capacity and performance. Audio was driving the CD format, and video is driving DVD. Both formats will coexist, since they serve different application areas. All DVD writers sold today can write both CD and DVD media, so it just depends on the task at hand and the cost of the disc, which media the consumer will record on their PC. So for audio creation and sharing of files less than 650 MB, the CD-R will remain popular, for DVD video creation, archiving and sharing of data up to 8.5 GB, a recordable DVD will be used.
Will you ever officially support the -R standard?
The DVD-R format does not give any advantage over the DVD+R/+RW format to the consumer. As DVD+R/+RW was designed from the start for both consumer video recording and PC applications, it gives optimal performance in both application areas.
Furthermore, the DVD+R/RW format has shown its leadership from the moment the formats hit the market. The recent introduction of DVD+R Double Layer and the DVD+R 16x are clear proof of this. Other formats, in spite of their earlier introduction, are just followers of the DVD+R/RW formats.
How do you think the battle of the -R and +R formats will evolve?
In the retail market you can see the trend that dual DVD±R/±RW writers are requested to avoid format discussions in store. The consumer will use the media that offers him/her the best quality, capacity, price and performance. We believe that DVD+R and DVD+RW will be the media of choice; all DVD+R media on the market passes verification and certification testing to ensure quality. Moreover, DVD+R is today available in 8.5GB DVD+R DL versions and can be used at all recording speeds, from 1x up to the new 16x speed. This means that older DVD+R writers can still write on the new media.
3. Interview with Frank Simonis of Philips
What are the differences that you have seen between the three key markets, North America, Asia and Europe, especially in terms of how they develop and adopt new technologies?
Where Japan is in most cases a launch territory for new technology, by now the growth rate is slowing down compared to the other regions. Both the European and US markets are expanding heavily. The US is known to be the largest market right now for PC writers, while Europe is the largest market for DVD Recorders.
What role if any, will China play in Philips's development, both for manufacturing and as a market?
Philips has been firmly established in China since 1985 (for more then 3 decades) and has expanded to become one of the largest industrial investors in the country. Total revenue in China reached over US$7.5 billion in 2003, with a cumulative investment exceeding US$2.6 billion. Philips presence in China goes beyond manufacturing. In 2000, Philips established its Philips Research East Asia in Shanghai to conduct strategic research and development. This center is on top of the 12 other world-class R&D facilities already functioning in China for new developments in lighting, color TV, audio, semiconductor, and medical systems. Philips remains committed to a solid presence in China by forming proactive partnerships with local companies, government bodies and research institutions. We hope this productive framework will help in setting standards in the industry and enhancing the competitiveness of the Chinese economy.
How big a role does R&D play?
Philips has a long track record in optical storage technologies and standardization, from laser disc in 1978, audio CD in 1982, CD-Rom in 1984, CD-R in 1989 to DVD video/rom in 1995 and DVD+RW in 1997. Philips is now one of the companies developing the next generation optical format Blu-ray Disc.
Philips has always put emphasis on R&D and has become one of the world's major private research organizations. The total R&D efforts for Philips Electronics amounts to approximately 8% of sales. Our R&D activities have led to the award of some 100,000 patents.
Do you design all your circuit boards and write all firmware for your optical drives in-house?
As indicated earlier, Philips focuses its development and manufacturing on "key" components, IC chipsets and the development of reference designs in-house. Consumer DVD recorders are developed and manufactured in-house. In order to meet the dynamic market demands and fast product lifecycles (currently less than 6 months), Philips partners with BenQ in the joint venture PBDS.
An added cost to manufacturing costs is the royalties that must be paid. What are your views on this and what would you like to see change here?
In our day-to-day life, products depend more and more on innovative technologies. Innovative companies like Philips, provide the world with new technologies on a continual basis. We share our innovations by licensing them to third parties against fair and reasonable conditions. By licensing our technologies to other companies, they get a ticket to new markets. And consumers can get access to innovations even quicker and against better prices, as we have seen in the past with CD and we currently see in the DVD market. Philips re-invests its licensing income in R&D in order to be able to continue delivering meaningful innovations to the world. We think licensing has advantages for all parties and the cost for licensing should be seen as part of the cost price: the cost for innovation.