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  • Competition Among CD-ROM Drive Makers Focuses on Price
  • March 26, 1998 (TAIPEI) -- CD-ROM drive makers will no longer focus on product speed in their competition to gain market share, and instead they will concentrate on reducing prices, industry observers said.
    The technology of CD-ROM drives has almost reached its peak in terms of performance, and the DVD drive is unlikely to dominate the market and threaten CD-ROM products soon, the industry observers said.

    Pricing is becoming the focus of competition. Until recently, Taiwan's CD-ROM drive makers competed by introducing higher-speed CD-ROMs. Now, there is very little difference between products with speeds of 32x, 34x, or even 36x, and profit margins are almost the same. Therefore, the industry observers said, manufacturers have nothing to gain by increasing product speeds.

    The 32x CD-ROM is priced at about US$54, while the production cost is about US$40.

    That profit margin of 20 percent is about the same as those for other CD-ROM drives, but is higher than profit margins of most other types of computer hardware.

    Taiwan's five leading CD-ROM makers -- Lite-On Technology Corp., Pan International Industrial Corp., Acer Peripherals Inc., Behavior Tech Computer Corp. and Advanced Information Inc.-- are all capable of manufacturing high-speed CD-ROM products.

    Must Systems Inc. and Royal Information Electronics Co., Ltd. are expected to start producing DVD-ROM drives from the second half of this year.

    The industry observers also said that DVD drives have very little chance of dominating the market soon. DVD drives will likely obtain about 10 percent of the optical drive market in 1998, due to high prices, royalty problems and a shortage of key components.

    (Commercial Times, Taiwan)

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    Updated: Wed Mar 25 16:22:27 1998