History 2002: Decline of CD-R/RW Writers in 2002

The CD-R/RW writer market experienced a decline in 2002, with unit sales changing by -11%, wrote David Bunzel, analyst from the Santa Clara Consulting Group.

Both the aftermarket and PC-OEM segments declined, influenced by weak overall sales of computer products. All regions of the world except Japan were affected, with declines in each market.

The PC-OEM segment was especially affected, with unit sales decreasing by -40%.

Media consumption rates continue to decline, with more developed markets like The Americas and Europe having a strong influence on this trend.

Continued growth in the installed base of writers has compensated for some of the drop in consumption, but nevertheless, CD-R disc sales registered a decline, changing by -2% in the quarter.

Overall CD-recordable revenue technology declined by 31%, to $976 million in 2Q.

Writers continued to be the most important factor in sales, representing 56% of revenue. Global writer sales decreased from 16.5 million units to 14.7 million on a quarter-to-quarter basis.

Lower demand resulted in oversupply, which contributed to aggressive pricing in branded markets.

Taiwan- and Korea-based manufacturers continued to expand their manufacturing presence and now represent 49.7% of the market.

DVD has had an indirect effect on the market, with combo drives featuring DVD-ROM technology offering users the ability to view DVD video content. This has been an important business, especially in the slimline segment, in which notebook PC vendors find this a very popular feature.

Toshiba and Matsushita have dominated the combo segment, but product offerings from a number of other manufacturers were evident in 2Q.

Faster speeds
Faster write speeds continues to be an important issue. Most vendors have had difficulty managing the transition between speeds because of the short product cycles available to recapture profit margins. The mainstream product for the quarter was the 24x, with 28% of unit sales. Six other write speeds were shipping in 2Q. 12x writers continued to ship in the quarter, representing 2% of the market. 8x product typically was supporting external and combo products and represented 11%, while 16x writers represented 14% of the market. The 32x writer, a fast writer in 1Q, was already declining in share of the market, representing 19% of sales. 40x and 48x writers combined emerged as an important segment, representing 25% of sales.

CD recordable discs declined 2%
Global CD recordable disc sales declined from 1,426.5 million units to 1,394.4 million on a Q/Q basis. CD-R discs represented 1,350.0 million units of this volume and saw modest declines in pricing during the quarter. CD-RW media sales continued to be limited, representing 3.2% of total unit sales. Overall capacity had modest growth, with some manufacturers shifting production from Taiwan to other markets.

Taiwan-based CD-R manufacturers shifted some capacity to Europe to limit the EC anti-dumping duties.

In addition, there was additional regional capacity added by European manufacturers.

There have not been price increases in Europe in response to the assessed duties, suggesting limited effect from this ruling.

This article is an abstract of news published on issue 177 on October 2002 from the former paper version of Computer Data Storage Newsletter.