[Bridging_the_digital_divide] DVD players now a commodity

[bridging_the_divide at touchsmart.net]

Since DVD players attached to a TV can be used with a TUI book, I would  
imagine this continues to bridge the digital divide by reducing the  
cost to deliver educational content.


DVD player profits down to $1
Published: August 9, 2004, 1:46 PM PDT
  By  Michael Kanellos
  Staff Writer, CNET News.com

The revolution in consumer electronics that was supposed to make  
everyone rich apparently isn't.

Commoditization is hitting China's DVD player manufacturers hard,  
according to researcher iSuppli. Between January and May, the average  
selling price of a DVD player exported out of the Guangdong province  
came to $40.80, leaving just about $1 in profit margins for the  
manufacturers.

  The province accounts for 84.2 percent of China's exports of DVD  
players and exported 34.5 million of the players during the January to  
May period.

  China is no slouch when it comes to making DVD players. More than 80  
percent of the chipsets for making DVD players that got produced  
worldwide in the first half of the year were shipped to China, where  
they were incorporated into DVD players that will eventually get sold  
under a wide variety of brand names.

  "Without possessing core technologies, these DVD player manufacturers  
can earn only limited processing and assembly fees, and they must pay  
royalty fees to the holders of intellectual property," analyst Byron Wu  
wrote in a report Monday. "The best scenario for the DVD player sector  
is an acceleration of the consolidation process, with larger firms  
taking over smaller shops."

  Thirty Chinese DVD player makers declared bankruptcy in the first half  
of the year, Wu noted.

  Technology products typically endure steep price declines as  
popularity grows because of the pervasiveness of standardization. The  
declines in DVD player prices, however, have been particularly severe,  
analysts have noted. Despite the difficulty of the market, it has paved  
the way for the emergence of companies such as Apex.

  DVD players have also served as a vehicle for Chinese manufacturers,  
which traditionally serve as contract manufacturers, to sell products  
under their own brand names in Europe and North America.

  Some manufacturers, including Jiangsu Shinco Electronic Group, have  
diversified into slightly higher-margin categories, such as portable  
DVD players.

  Despite the difficulty in eking out a profit, the popularity of  
players remains unabated. Shipments in 2004 should increase to 110  
million units, according to Wu, up from 90 million in 2003.

http://news.com.com/DVD+player+profits+down+to+%241/2100-1041_3 
-5302728.html?tag=st.pop
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