CD-RW/DVD-ROM Drives Are Creating A Niche

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While CD-RW drive sales are soaring and DVD-ROM drives continue to struggle for widespread consumer acceptance, drive manufacturers are pinning their hopes on the CD-RW/DVD-ROM combination drive to boost DVD-ROM's acceptance.

The combination drive now being shipped by Toshiba is just the first in what promises to be a flood of such hybrid drives, said industry watchers. DVD-ROM drive sales and software development have languished because consumers are not willing to purchase DVD-ROM drives until software is available, and software publishers will not spend money developing titles until there is a large installed base of DVD-ROM drives.

Regarding the combi-drives, TEAC's marketing and product development manager Scott Elrich said, "This is definitely going to be a trend. Rewritable is hot right now, and the consumer is ready for it. Everything was headed for DVD-ROM, but once rewritable popped up PC vendors were stuck in a dilemma over which option to offer. So about one year ago the storage vendors saw a hybrid drive was needed."

PC Data, based in Reston, Va., reported that for the first half of 1999 CD-RW drive dollar sales increased 123% compared to the same period last year, with almost 356,000 units shipped. In addition, the drives' average selling price has dropped to $277 from $419 during this period.

DVD-ROM drive sales, while considerably smaller, are also growing quickly. According to PC Data, dollar sales jumped 97% in the first half of 1999, while unit sales rose 175%. The average selling price has dropped to $213 from $298.

"DVD-ROM is the future, and this will also help solve the DVD software problem," said Cathy Longfellow, Toshiba's senior product manager for optical products. She has been encouraged by DVD-ROM software developments, but added a killer application is still not on the horizon.

David Deane, Hewlett-Packard's strategic business director, said in June that "there is no compelling DVD software available. We still expect a killer DVD application to come, but when it will happen we just don't know."

Toshiba will start shipping next month its SD-R1002 drive to distribution, VARs and resellers, and the company expects OEMs to start including the drives in PCs in the first half of 2000. The OEM price will be less than the cost of installing separate CD-RW and DVD-ROM drives, but Longfellow could not be more specific, although she did note that the SD-R1002 places Toshiba in the very hot CD-RW market for the first time.

Elrich said the combination drive's price will decide how successful the product is with OEMs. OEMs now deal with severe cost restrictions in order to produce sub-$500 PCs, he said, so if the new drives are too costly the OEMs may bypass them in favor of 32x CD-ROM drives that cost just $30.

Neither Elrich nor Longfellow thought the combination drives would have a negative impact on DVD-ROM's eventual mass adoption.

"These drives are a bridge product," said Longfellow. "They offer the benefit of using cheap CD-R and RW media and the data capacity in DVD. But DVD-ROM is the future."

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