DVD Set To Overtake High-End CD

By Amy Gilroy On May 7 2001 - 6:00am

Following the lead of the home market, car DVD could eventually obsolete mid- to high-end CD players and is already impacting car CD players at $900 and above, suppliers said.

In three years, car DVD receivers, which can also play CDs, could begin impacting the mid-fi CD player market, suppliers said.

In the home A/V market, "DVD has pretty much cannibalized CD sales," said Kenwood marketing strategy manager Tetro Shimonishi. "Last year some retailers such as Circuit City and Best Buy were aggressively marketing DVD as a replacement for CD with signs when you entered the stores that said, 'Looking for a CD player, why not get DVD?' The same will hold true for car once prices come down."

"Eventually, everything will probably be DVD," added JVC national product manager Chad Vogelsong.

DVD's higher sampling rate of 96kHz with 24 bit processing render most DVD players superior to high-end CD units. While no suppliers said publicly that they have ceased producing high-end CD players, several said the impact on CD is noticeable.

"Yes, there's already been a shift from high-end, quality-oriented CD players to DVD video systems," said Chris Kehring, senior assistant product planning manager for Pioneer.

"We're seeing already many customers opting for our single-play DVD or DVD disc changer versus CD. We'll start transitioning the higher-end CD players over into DVD product over the next two years," said Alpine VP marketing Stephen Witt.

Panasonic, which does not produce a high-end CD player, is aggressively pushing DVD with four models including a DVD receiver at $1099. (This compares in price with an Alpine high-end CD player at $1000 to $1100).

According to Panasonic national marketing manager Rob Lopez, DVD will begin cutting into midline CD sales in 2004, when the price of a DVD receiver "could be in the ballpark of $599." The impact of DVD on mainstream CD is expected to be far off in the future.

"An indash AM/FM CD with a nice brand name is only $149 to $199, so I don't see the average consumer, who doesn't have a video screen in their car, even spending $599 for a DVD instead of CD," noted Audiovox Prestige national sales manager Fred Roetker.

Not only price will spur DVD demand in the future, but music quality too as DVD offers the advantage of multi-channel audio, be it through DVD Audio or multi-channel DTS 5.1 surround, said Pioneer, JVC and others.

"It's still in its infancy, but multi-channel is growing rapidly. The DVD Audio spec is finalized, which will spur development because even though you don't need DVD Audio to do multi-channel, everyone was waiting for the DVD Audio spec. Now there are more and more software suppliers like Warner Music getting into it and more software is the key," said Pioneer's Kehring.

Clarion's approach is more cautious. There is still much confusion about DVD Audio, said director of product planning Jack DeBiasio. He noted the dearth of DVD Audio music titles (less than a dozen) and that DVD Audio is competing with other formats such as HDCD (High Definition CD). "We're still looking a year or two down the road before the dust settles," he said.

Panasonic is pushing ahead with DVD Audio players and remains the only car audio supplier producing one at this time. The company said it will introduce more DVD Audio models this year and will soon drop the price of its current DVD Audio capable CQ-DVR909U to bring it more line with pricing on the newly released (non-DVD Audio) DVD receiver called the CQ-DVR7000. The new DVR7000 incorporates a built in Dolby digital processor and carries a suggested retail price of $1099. The CQ-DVR909U formerly had a suggested retail price of $1999 "and is expected to drop significantly," Lopez said.