DVD players get more bells, whistles
By Jon Healey
Los Angeles Times
No product has been as bittersweet for the consumer electronics industry as the DVD player.
Drawn to the sharp pictures and cinematic sound, consumers have bought up digital versatile disc players faster than any other electronic device in history. Even though the players became widely available in the United States only 5 1/2 years ago, more than 46 million homes now have one attached to a TV or computer monitor.
But sales have skyrocketed in large part because prices have plummeted. In turn, so have manufacturers' profits. As no-name brands have flooded stores with no-frills players, the Japanese and European electronics giants that invented the DVD have watched their profit margins get squeezed in record time.
Retailers' profits have mostly evaporated, too, as the average price of a DVD player has fallen from $491 in 1997 to an estimated $118 today, according to NPD Intelect, a research firm. Entry-level units sell for $59 or less.
"The joke is you're going to get a free DVD player with the purchase of a DVD (movie) pretty soon," said Noah Herschman, vice president for video at Tweeter Home Entertainment Group of Canton, Mass.
Even worse for consumer electronics makers and retailers, the DVD experience may be a harbinger of things to come. Competition at the market's low end is intensifying for all sorts of digital gear, fueled in part by low-wage assembly plants sprouting up across China.
Faced with this difficult situation, many manufacturers and merchants hope to widen their profit margins again by enticing consumers to buy something more than just a budget DVD player.
"You survive by making new technologies," explained Andy Parsons, a senior vice president at Pioneer Electronics Inc. in Long Beach, Calif.
One area with potential is DVD recorders.
Mike Mohan, director of audio-video merchandising for Good Guys Inc. of Alameda, Calif., predicts that more DVD recorders than players will be on the market within two years. And he expects them to sell for $200 to $300 per unit.
Meanwhile, at the recent International Consumer Electronics Show in Las Vegas, an array of more expensive DVD machines were on display.
Among their features:
High definition: At least two companies — Samsung Electronics Co. and Philips Electronics — plan to introduce DVD players this year that convert standard DVD movies into simulated high-definition pictures when viewed on an HDTV set.
Next year, the first DVD players capable of playing true high-definition discs are expected to arrive. But manufacturers have split into two camps that are backing incompatible high-definition formats, potentially slowing the emergence of the new generation of discs.
Hard-drive recording: Several manufacturers, including Toshiba Corp. and Apex Digital Inc., have or soon will offer DVD recorders with built-in hard drives for temporarily storing programs.
And Thomson, which makes RCA products, has two types of hard-drive-equipped DVD players in the works: one for recording TV, the other for storing music in a digital jukebox.
The latter also will play radio stations from the Internet.
Home networking: Sonicblue Inc. plans to introduce a DVD player soon that can connect to a home network. The device lets consumers move digital music and movies from their computers or the Internet to their stereos and TV sets.
