Houston Community News >> China to Phase Out DVD Players
11/29/2006 China— Leading
Chinese makers are to stop making DVD players from 2008 as part of China's plan
to replace foreign technology with a new home-grown standard, an industry
alliance chief said.
"Nineteen out of our 21 member manufacturers will be producing EVD players with compatible function only by 2008," Zhang Baoquan, the secretary-general of the EVD (Enhanced Versatile Disc) Industry Alliance told AFP.
In the past, only one major DVD producer was making EVD players and only around 700,000 units were sold last year, Zhang said.
This accounts for less than one thirtieth of the annual sales of DVD players according to iSuppli Corp, a market research company specialising in the electronic manufacturing industry.
Apart from the media industry, China has been pushing its own standards in many other product categories such as third-generation mobile phones, wireless local area networks, digital TV, and home networking.
"It is a general trend for China to develop its own industry standards, as it could implicitly help Chinese enterprises improve their competitiveness in the domestic market," said Ma Jun, Deutsche Bank's chief China economist.
"Foreign companies in China will have to either buy patents or pay royalties to Chinese companies or form joint ventures with local intellectual property right holders," he said.
The 19 Chinese manufacturers' decision to join the push for the EVD will be officially announced next Wednesday, Zhang said.
"They had to do it because of the shrinking profitability of DVD players made in China," he said.
"There is almost no profit for Chinese DVD makers as they have to pay about $US7 in licensing fees to foreign patent holders per DVD player, which are sold at around $US20 only - both at home and abroad."
The average selling price of EVD players will be set at 700 yuan ($US89), according to Zhang. He said the higher price is meant to reflect better quality than the DVD players.
Members of the alliance consists of not only disc-player manufacturers but also publishers and distributors which include TCL, China's biggest TV maker, and Gome, the country's largest home appliance chain.
Gome will open 150 special areas in its outlets around the country to sell EVD players, Zhang said.
According to a report by the official China Daily, the alliance will have another 800 franchised outlets selling EVD discs and expects the number of franchised outlets to rise to 1200 by the end of this year.
The Chinese government has been bolstering the development of EVD in a bid to reduce the country's reliance on foreign technology since 1999.
(Contributed by AFP)