Monday, January 12, 2004		Guest Speak

CD-RWs set to capture market
R. Manikandan

CDs and DVDs are everywhere these days. Whether they are used to hold music, data or computer software, they have become the standard medium for distributing large quantities of information in a reliable package. The Indian market has come a long way in the sphere of Optical Storage Devices (OSD). The need to store, make copies and manage digital images, video, text and data quickly and easily have led to a spurt in the OSD market. The rising popularity of the OSD’s can be gauged by the presence of large number of vendors mainly MNCs like LG, Sony, etc, in this space coupled with the wide range of product offerings. The end-consumers have choices both in terms of technology and price. The product range spans from the ubiquitous CD-ROM, CD-RWs, combo drives to DVD drives. OSDs have been steadily increasing their footprint among the PC segment in India and trends suggest that they are further penetrating into the PC user segment with steadfast consistency. Certain market studies suggest that the size of the OSD market in India is estimated to be around 75 to 80 per cent of the installed base of the PCs in India. Given such a scenario it will not be long before we see an Optical Disk Drive (ODD) drive in almost every PC in the country. The studies also indicate that of the estimated market size for OSDs 70-80 per cent would be CD-ROMs, 20-25 per cent CD-RWs with DVD ROMs doing just 5 per cent.

Booming market

One of the prime factors that determine the choice of customers while buying CD drives is the speed of the device in terms of loading, reading rewriting, etc. The other significant factor that influences buying decisions is the stability of the device in terms of overall operations that can be executed. One discerning look at the buying patterns and the buyer preference parameters and it becomes quite evident that customers are looking for devices that are high on the technology front while being simple and easy to use.

The statistics for CD-ROMs suggest that they have managed to gain maximum attention of the PC users and have reached a certain level of maturity. As far as CD-RWs are concerned the market is steadily growing. Consumers are increasingly realising the immense benefits that can be derived by the use of CD-RWs and the rate of adoption for the same is also correspondingly increasing. It is because a CD-RW is a more powerful device than the CD-ROMs and is packed with a host of features that easily translate to good value for money spent. In the SOHO segment, CD-RWs are used mainly for storage and entertainment purposes, while the SME segment perceives good utility value from CD-RWs. The share of CD-ROMs may become minimum in A and B markets, while it could continue to sell in B and C class pockets. Price will be the biggest determining factor. As the price gap narrows down CD-RWs could become the norm. Some of the new technologies involved with CD-RWs include Buffer Under Run Proof, Mt. Rainer Technology Support, ZCLV and PCLV.

DVD v CD-RW

An interesting point to note is that DVD drives have not been able to catch the imagination of the users. Some of the large operators in the OSD market tried to push the sales of DVDs by stopping the shipping of CD-RW devices but eventually failed to capture the market because of the prohibitive costs. Besides, the non-availability of media titles in the DVD segment is also a deterrent factor to the growth of this segment. Also, the media cost of DVD-ROM/R/RW is very high making it prohibitive for most users and enabling piracy in DVD to catch on. The target customers for DVDs are home users, basically looking for multimedia-based utilities. Also, the higher storage capacity of the DVD media would make it a more attractive purchase for them once the prices come down. With the more low-cost CD-RWs coming in, consumers, mainly the home users have yet to get used to the idea of switching over to DVD drives. For choosing the right drive one should take into account three main parameters price, application and brand. Brand should be an important consideration in choosing a drive. Indian market like in any other segment is price sensitive in the OSD space too. Price consciousness is the major reason why CD-ROM drive still has the lion’s share in the ODD market. But a careful analysis shows that the price difference between a CD-ROM and a CD-RW is not much if we consider the value adds that CD-RW provides over CD-ROM.

Applications like copying music, recording videos, creating CD albums, creating data back up will increasingly drive the customers towards the CD-RWs. However, what is needed is to create awareness among the end users, channels and retails, regarding the advantages of CD-RW drives over CD-ROM, in terms of price differentiation, applications, etc. The coming years would see the increasing use of CD-RW drives though the CD-ROM would continue to have its share of pie.