Can silver turn to gold?
Sacramento Business Journal - by Barbara Marquand
If you're always first on the block with the latest electronic gadget, this Christmas you'll probably be hoping for the newest high-tech toy -- DVD, also known as digital versatile disc or digital video disc.
DVD has been heralded as the next big thing, bringing movie theater-quality sound and video to living rooms and greatly increasing information storage and speed for for personal computers.
But if you're like most consumers -- who still haven't figured out how to set the clock on their VCR -- the earliest you'll be even thinking about DVD is probably Christmas 1998.
That's when manufacturers and industry analysts predict DVD will begin to take off.
And several companies in the Sacramento area are gearing up to cash in on the anticipated appetite for DVD, include JVC Disc America Co., Packard Bell NEC Inc. and Apple Computer Inc.
DVD discs are the same size as audio compact discs and CD-ROMs, but they're capable of storing up to 25 times the amount of pictures and sound. This is allowing companies to offer vast amounts of information in smaller, more portable formats:
• Digital Directory Assistance in Bethesda, Md., can fit its PhoneDisc PowerFinder USA -- featuring 112 million phone listings -- on a single DVD-ROM disc. The CD-ROM version requires six discs.
• The first DVD-ROM navigation systems will be launched in Japan next month. They'll be sold in car accessory stores for between $1,500 and $1,800, including an 8-inch-wide LCD screen.
• One DVD can hold an entire movie, and include such extras as R and PG versions of the same movie on the same disc, multiple languages and even biographical information about the movie stars.
DVDs can be played only on a DVD video player or on a computer with a DVD drive. For those who have already invested heavily in CD-ROMs, DVD drives probably will have backward compatibility, meaning they can play both types of disc.
But the consumer electronics industry still has a few hurdles to jump before DVD becomes a household acronym -- and some cautious manufacturers are hedging when it comes to forecasting how much money it will make them.
DVD products started appearing in stores last October. Most of the major consumer electronics manufacturers are marketing DVD video players at prices ranging from about $500 to $1,000, and computer companies are beginning to introduce new models with DVD drives.
The technology blurs the line between PCs and home theater. Apple, for instance, will introduce computers this year that can play DVD-ROM and be hooked up to the television to play DVD video.
"We see people possibly having their Macintosh in the family room and running a video cable from their computer to the television," said Gary Leiber, Apple's worldwide product marketing manager for Power Mac. "It's the first step in this idea of convergence."
Other companies with Sacramento-area operations are also heavily involved in DVD. Packard Bell NEC will introduce a product with DVD capability sometime this year, said Jack Yovanovich, the company's product manager. The market for DVD will be primarily entertainment-driven, he said.
"I think people will find ways to employ DVD in business, but the real drivers of the market are going to be games and interactive television movies," he said.
JVC Disc America began production of DVD discs in April at its plant on Laguna Boulevard in Elk Grove for the domestic home entertainment market. The plant, which also produces audio CDs and CD-ROMs, produces 3 million DVD discs a month, said Dave Rodgers, external affairs manager for JVC America Inc. The company employs 100 in Sacramento. In the United States, JVC is also manufacturing DVD discs in Tuscaloosa, Ala.
Meanwhile, NEC Inc., which has a semiconductor fabrication plant in Roseville, is one of a handful of semiconductor companies that are actively involved in DVD technology. DVD technology will boost demand for NEC's current semiconductor products, such as memory devices, and create opportunities to produce brand- new products, according to Alfonsus Lunardhi, NEC's staff technical applications and marketing engineer for consumer products.
Although DVD holds a lot of potential, some manufacturers are hesitant to forecast revenue just yet. "That totally depends on how successfully DVD takes off," Lunardhi said.
Said Packard Bell's Yovanovich: "It's a matter of timing. This year it's going to be for early-adopters and people who want to develop home theater systems. "I think Christmas 1998 will be huge."
He said for DVD to take off, costs must come down
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