August 19, 2001 9:00 PM PDT

HP unveils first DVD+RW drive

The war over DVD recording standards will escalate Monday when Hewlett-Packard unwraps the details on its first DVD drive for PCs that lets people repeatedly record on discs.

The DVD-writer dvd100i, which will cost $599 when it hits store shelves in September, will be the first commercially available drive based on the DVD+RW standard. With it, consumers will be able to record video onto a disc, play it on a typical home DVD player, and then erase and record again on the same disc. HP plans to incorporate the drives into its PCs later this year.

PC makers and consumer-electronics makers are hoping these types of drives will perk up holiday sales, in part, on a theory that consumers will rediscover the home movie. Two years ago, recordable/rewritable CD drives propelled PC sales. Rewritable DVD drives could do the same this year, some industry watchers believe, as well as spur demand for DVD players. DVDs can also hold 4.7GB of data, seven times as much as recordable CDs.

The road to video nirvana, though, is paved with potholes.

The new drive will enter the mess that is the DVD rewritable market. Three competing standards--DVD+RW, DVD-RW and DVD-RAM--are vying for market supremacy, confusing compatibility issues and keeping prices high.

"I give HP a lot of credit for building up CD-RW, and they have the potential to do the same with DVD rewritable. But they--and the rest of the industry--have to be careful in managing expectations," Dataquest analyst Mary Craig said.

HP, along with Sony and Philips Electronics, developed the CD rewritable format.

HP Product Manager Dean Sanderson would not reveal the internal sales expectations for the DVD+RW drive. However, Sanderson said, "since late 1995, CD-RW has been very successful for us, and we view DVD+RW as the next logical step in capitalizing and building off that success."

Craig estimates that 2.1 million DVD rewritable drives will ship by the end of 2002. By 2005, Craig expects 14.3 million such drives to ship. Craig called her projections "conservative" because there are many variables that could help or hinder shipment figures, such as the current battle over a DVD rewritable standard.

DVD formats
A number of DVD formats are vying for consumers' attention. Here is a quick rundown.
Format Function
DVD-ROM Read only.
DVD-R Record once. Movies can be played on most recent consumer DVD players.
DVD-RAM Record, erase repeatedly. Best used for data storage. Recorded movies cannot be played on most consumer DVD players.
DVD-RW Record, erase repeatedly. Mainly for movies. Compatible with most recent consumer DVD players.
DVD+RW Record, erase repeatedly. Data storage or movies. Compatible with most recent consumer DVD players.
Although the HP drive will come out in time for the holiday shopping season, NPD Intelect analyst Stephen Baker said he doesn't expect "big enhancements to the fourth-quarter sales of computer products."

In addition to HP's backing, the DVD+RW format has the support of Dell Computer, Sony, Philips Electronics, Mitsubishi Chemical, Ricoh, Thomson Multimedia and Yamaha.

The media for the new drive, which HP also plans to sell, will cost $15.99 per disc. The drive and the disc prices are lower than those announced thus far from manufacturers using the DVD-RW or DVD-RAM formats and have "set the low watermark for the industry," Craig said.

The HP drive will rewrite onto DVD discs at a speed of 2.4x--which Sanderson said was the equivalent of a CD-ROM drive reading at 20x--and can read DVDs at 8x. The drive will rewrite to CD-R discs at a speed of 12x and to CD-RW discs at a speed of 10x. And the drive can read CDs at a speed of 32x. The drive and discs will be available initially at Best Buy, Circuit City and CompUSA.

HP's Sanderson added that the drive is "designed to be compatible with the most number of DVD players on the market," which Baker said is the most significant feature the drive could have.

Another factor in DVD+RW's favor: Dell also plans to incorporate DVD+RW drives into its PCs. HP is the largest PC manufacturer as far as retail sales, while Dell is the largest overall in the world. DVD-RW adherents include Compaq Computer and Apple Computer.

Regardless, analysts say, the challenge will be to wait for the market to mature and grow enough to meet expectations.

"We don't know how large this market can be, so it's probably best to be conservative. But the technology industry has never been very good at that," Craig said.

Baker agreed, adding that only early adopters--a small segment of the overall market--will be able to appreciate DVD rewritable at this time. That's because, for the best experience, people will need a digital camcorder and a high-end PC with a FireWire port.

"At this point, rewritable DVD has limited utility," Baker said. "But this is just the beginning."

 

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