Last week Hewlett-Packard (HP) dropped the news that is was exiting the add-on CD-RW market in order to concentrate on the emerging recordable DVD market.
For the company, it seems to make sense: CD-RW has become a commodity product, meaning that margin in that business in now negligible (not as bad as the SDRAM market, but that's mostly the direction it has been heading). Also, with almost all new consumer PCs shipping with CD-RW as a standard, the add-on market for CD-RWs is drying up rapidly.
Online retailer Dabs.com says that a significant portion of the market share was held by HP, but believes that other players such as Ricoh and Yamaha will move in and mop up on the gap. Sales director Jonathan Wall, says HP has made the right decision as it was definitely losing money on CD-RW. With recordable DVD being a mostly untapped market, it will be able to charge a premium price for the product. External recordable DVD drives start in the region of $599, a hefty amount more than their CD-RW brothers.
On the other hand, Les Billing, MD of distributor Microtronica, raises the point that the DVD market is not as easy as it seems. Firstly, manufacturers still face a standards issue, with various DVD writing formats fighting it out to become the de facto choice (DVD-RAM, DVD-RW and DVD-R all compete in this space) - Apple faced this issue when it released its Superdrive (a combo recordable CD/DVD drive) built into its G4s, eventually settling on DVD-R.
Secondly, there is the issue of how well recordable DVD will be accepted by users: CD-RW is cheap, widely available (as is its media), easy to use and not as obviously limited in capacity as the 1.44-inch stiffy drive was. Did we mention cheap?
Compared to this, why does the world need to rush out and upgrade to DVD? Of course, it's a more advanced technology with a superior storage capacity. But the number one thing that DVD handles better than CD is video. CD based films tend to come in a VCD (Video CD) format, which are extremely popular in Asia, and have shoddy quality (when compared to DVD). But is video, or should we say the ability to write video, enough to get people spending so much more than what they can get CD-RWs for? ®