Leading manufacturers in Taiwan, including BenQ, Mustek Systems, Eastern Asia Technology and Ya Hsin Industrial, are preparing for production of DVD recorders equipped with hard disk drives (HDD DVD recorders), in response to cutthroat price competition for ordinary (without HDD) DVD recorders, according to the makers.
The Taiwan-based manufacturer Protop Innotech plans to offer entry-level DVD recorders for retail sale at US$99 through the Wal-Mart chain in April, according to the company. The retail price is equivalent to competing for orders at zero gross margin or even a loss because the current OEM production cost of DVD recorders is US$90, the makers pointed out.
To avoid a price war, and in view of the large market-growth potential of HDD DVD recorders over the next one to three years, the makers have decided to move to a different market niche. They plan to launch HDD DVD recorder models at a retail price of US$299 in the second or third quarter of this year at the earliest, lower than the current level of US$399-449.
With a procurement cost of US$55-60 for an 80GB HDD at present, the production of US$299 HDD DVD recorders is still profitable, the makers noted.
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