DVD Players and Recorders

Mainland China and Taiwan digital camera manufacturers are forecast to boost production by 20% in the next 12 months. Prices are expected to remain flat or to fall.

Which suppliers are best positioned to meet your needs in this time of rapid industry change?

You'll find the answers in this report, as it provides you with profiles of 66 major manufacturers, including in-depth findings from in-person tours of 22 factories.

Plus, you'll also gain essential industry insights, including advance information on new products, price trends, R&D plans and other key issues that will impact your digital camera sourcing in 2005.

What you'll get

In-depth profiles of 25 leading manufacturers outlining their production capabilities, export strategies and R&D plans. Based on factory visits and personal interviews with senior managers, this information is not available anywhere else

Short profiles of 22 additional companies highlighting key statistics including factory locations, monthly production capacities, QC initiatives and more

A detailed product comparison table, so you can compare popular DVD players — sorted by your chosen specifications — from each supplier

The results of Global Sources' latest supplier survey, forecasting price, product, production and R&D trends for the next 12 months

How you'll benefit

Better understand the impact of royalty payments and the costs of imported components on your final FOB price

Identify the DVD players and recorders most suitable for your price entry point — and the manufacturers who supply them

Get an advance look at companies' capital investment plans and how these upcoming expenses may impact your sourcing decisions

Benefit from verified contact details — such as phone numbers and e-mail addresses — for all featured suppliers

Executive summary

In 2004, about 92.3 million units of DVD players and recorders were manufactured in mainland China, an 8 percent increase year-on-year. About 85 percent of production, or 78.5 million units, was exported.
Mainland China-owned companies remain the world leaders in DVD player production. This is despite the closedown of operations or migration to other product lines by many of these makers in 2004, forced by the fierce competition in the DVD player line, as well as patent fees.

Taiwan-owned companies are the acknowledged leaders in the production of DVD recorders. The Topology Research Institute estimates that Taiwan supplied one-third of the global demand for DVD recorders in 2004. Annual shipments of DVD recorders from Taiwan grew from 742,000 units in 2003 to over 3 million units in 2004.

This report covers 47 DVD player and recorder manufacturers in mainland China and Taiwan. The 47 companies account for more than 50 percent of production in mainland China and Taiwan. Global Sources market analysts visited the factories of 25 of these companies. Among the findings of this report are:

Manufacturing bases
There are 100 to 150 active makers of DVD players, portable DVD players, DVD recorders, and DVD home theater systems in the mainland. Guangdong province, particularly the Dongguan-Huizhou-Shenzhen triangle, is home to more than 80 percent of makers.

From 20 to 30 Taiwan companies are active in the DVD player and recorder line. Most have established factories in Guangdong to keep costs down. A few assembly lines are left in Taiwan for pilot runs and small-quantity orders.

In Taiwan, Taipei is the manufacturing base of most of the makers. Other makers are located in Taoyuan, Chung-li and Taichung.

Manufacturing capability
The combined monthly output of surveyed makers as of February 2005 was 4.25 million units broken down into: 2.30 million home DVD players, 627,000 home DVD recorders and 1.32 million portable DVD players.

Makers from both the mainland and Taiwan have made significant investments in equipment and machinery. Capital outlays in 2004 ranged from US$1 million to US$10 million.

Makers import key components. MTK, ESS, ST, AMLogic, LSI Logic and Sunplus are major DVD player IC sources, while LSI Logic and AMLogic are the major sources of DVD recorder ICs.

Export orientation
Mainland China makers export between 60 percent and 90 percent of their production — 70 percent to OEM buyers, 20 percent as own-brand sales and 10 percent to non-OEM buyers. Western Europe is the biggest export market followed by North America.

Taiwan makers export more than 90 percent of their production — 55 percent to OEM buyers, 35 percent as own-brand sales and 10 percent to non-OEM buyers. Western Europe and North America are the key export markets.

Industry overview

This China Sourcing Report provides a comprehensive overview of mainland China and Taiwan's DVD player and recorder industries. Industry analyses, and export and manufacturing capabilities were studied to present an exhaustive summary of product availability and FOB pricing in 2005.

Forty-seven companies from the region are featured in this report. Twenty-five of these profiled companies were personally interviewed by Global Sources' market analysts. Guided factory tours were also conducted.

The other 22 makers in the report furnished Global Sources key company facts and production statistics.

These makers described their export manufacturing and R&D capabilities, key features and prices of their export models, and their plans for 2005 and onwards.

Mainland China makers shift focus
Mainland China has rapidly become the world's largest DVD player production base in the last five years. In December 2003, the mainland had an estimated 300-plus manufacturers of DVD players.

In 2004, there were 100 to 150 active makers of DVD players (including portable DVD players), DVD recorders and DVD home theater systems in the mainland. About 92.3 million units of DVD products, comprised mostly of DVD players, were produced in mainland China. This is eight percent more than the production in 2003.

Guangdong province, particularly the Dongguan-Huizhou-Shenzhen "triangle", is home to more than 80 percent of these DVD player and recorder makers. Most companies are privately owned. Taiwan-, Hong Kong SAR-, and Singapore-invested companies are also present in the area. Some well-known brands have likewise set up wholly-owned or joint-venture companies.

There are two factors that made the province a recognized major production hub.

First, is the presence of strong component facilities which feature SMT, molding, tooling and plastic injection, and component sourcing.

Second, is its strategic location as a shipment port to overseas markets through Hong Kong.

Other production centers in the mainland include Shanghai, Jiangsu and Zhejang provinces in east China, Sichuan province on inland China and Fujian province in the southeast coast. Most of the companies located in these areas are state-owned enterprises.

Royalty payments for DVDs
In 2004, many mainland makers decided to either close down their DVD operations or shift their focus to more profitable products such as portable DVD players, DVD receivers and DVD home theater systems.

This situation was brought about by the fierce competition coupled with high intellectual-property-right (IPR) fees required by patent holders.

Mainland makers mostly pay IPR fees to 3C, 6C, Macrovision and Dolby for DVD players. Several makers have also signed agreements with DTS and MP3 technology owners.

1C and MPEG-LA royalty payments are still in negotiation between IPR owners and makers.

Royalty payments to 3C patent holders such as Philips, Sony, Pioneer and LG range from US$3.50 to US$4 per unit.

Samples of supplier profile

A-Zone International Co. Ltd
A-Zone International Co Ltd was set up in 1994 as a maker of IT and A/V products, mostly for the European market. In additional to home DVD players and recorders, it also makes home theater systems, LCD PC monitors, industrial monitors, computer multimedia subwoofers, surround sound speakers and wireless speakers.

The company is a 65-35 joint venture between mainland China and Taiwan investors. The privately owned company began making home DVD players and recorders in 2002.

About five percent of DVD products are exported, contributing US$2 million to its revenues in 2004. Europe takes up 60 percent of total exports, while North America accounts for 20 percent. Other export destinations are the Middle East, South America, Southeast Asia, Australia and New Zealand.

Sixty percent of output goes to OEM buyers, 10 percent to non-OEM clients and 30 percent to own-brand sales. One of its major OEM clients is Xenion. The company recently entered into a partnership with Provision of the Netherlands on the development of multimedia products.

Its latest offerings in A/V multimedia products include centralized wireless home entertainment systems that feature the latest Bluetooth technology.

Manufacturing capability
Although headquartered in Taipei, AZone's 2,790sqm factory is located in Shenzhen, Guangdong province. Total workforce in 2004 stood at 1,200, of which 210 are production workers. The Shenzhen factory houses six production lines. Cosmetic design, SMT production, PCB sub-assembly, QC and R&D are all done in-house, while mold-making and plastic injection molding are outsourced. Final assembly is partly done in-house and partly outsourced.

Monthly production capacity for DVD players and recorders is 10,000 units, expanding to 50,000 units including outsourced production. Current monthly output is 3,000 units or about 60 percent of in-house capacity.

DVD recorders make up 50 percent of total production, while portable models account for the other 50 percent.

QC & R&D
A-Zone's DVD products offer UL, CE, FDA and FCC quality approvals. Management quality systems and production processes comply with ISO 9001 and ISO 14001 standards. The company takes all steps necessary to ensure product quality by sourcing components only from Japan and United States suppliers. It also provides one-year warranties on all its products.

Last year, A-Zone spent US$1 million for equipment procurement and upgrade.

The company takes R&D seriously and allocates five percent of annual sales to product design and development efforts. It employs 20 R&D engineers and 40 QC technicians, but it also trains the rest of its production staff to perform QC at each stage of the production process.

Materials and components are checked at each stage of assembly. QC technicians also conduct random product checks, finished product checks (pre-packaging), after-packaging checks, and pre-delivery checks.

Sample of product gallery

Home DVD players Company: Aojia Model name: F28 FOB price (US$): 61 Release date: 2003 Minimum order (units): 1,100 Guarantee/Warranty (months): 12 Product approval: CE Dimensions (mm)/Weight (g): 620 x 378 x 265/ 14,000 DVD solution: Sunplus A/V output: Composite, S-video, component, RGB SCART

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Global Sources Industry-specific China Sourcing Reports

All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.

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