DVD recorder prices fall as production surges in Taiwan

The average selling price (ASP) of DVD recorders is expected to fall by as much as 50 per cent later this year as Taiwanese shipments of DVD recorders increase sharply, according to a government-backed market research firm.

Taiwanese hardware makers excel at producing large volumes of IT hardware products at low cost. The ability to produce large volumes of IT products at low cost has made Taiwanese hardware makers the production leaders of many hardware components and devices, such as laptop computers. And Taiwanese companies would take a larger share of the market for DVD recorders as prices fell, Market Intelligence Center (MIC) said.

MIC is part of Taiwan's Institute of Information Industry, a government-backed think tank set up to support the development of the country's IT industry.

Taiwanese companies, including BenQ and LiteOn Technology, shipped about 1 million DVD recorders - including DVD+RW drives, DVD-RW drives and DVD-RAM drives - worth $US220 million during the first half of 2004, up twenty-fold from shipments of close to 50,000 units worth $US14 million during the same period last year, MIC said.

By comparison, Taiwanese companies shipped 700,000 DVD recorders worth $US140 million during the second half of last year, MIC said. Looking ahead, Taiwanese companies could ship up to 2 million DVD recorders during the second half of this year, bringing the total number of DVD recorders shipped this year to 3 million units, MIC said.

Shipments of DVD recorders from Taiwanese companies were boosted by growing sales in the North American and European markets and reflected an improved ability of Taiwanese companies to source key components.

MIC said a drop in the price of key components, including DVD loaders and MPEG-2 decoder chips, would cause the ASP of DVD recorders to fall by nearly 50 per cent during the second half of this year. Combined with consumer interest in global sporting events, such as the 2004 Olympic Games in Athens, this price drop would spur demand higher for DVD recorders.

Based on MIC's numbers for the shipments and value of Taiwanese-made DVD recorders, the ASP for Taiwanese-made recorders was about $US220 during the first half of the year. That represents a reduction of 22 per cent compared with an ASP of around $US280 one year ago but an increase of 10 per cent when compared with the ASP of $US200 during the second half of 2003.

Japanese companies were currently the world's largest producer of DVD recorders, accounting for around 50 per cent of shipments during 2003, MIC said.

European companies accounted for 10 per cent of shipments while South Korean and Chinese companies each accounted for between 6 per cent to 8 per cent of shipments last year.

MIC did not specify what percentage of shipments came from Taiwanese companies, but said Taiwanese companies could account for 25 per cent of shipments in 2004, making them the second-largest supplier of DVD recorders.

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