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  DVD Players 1H08 Shipments Drop In China  
August 29, 2008

1H 2008 shipments of China's DVD players dropped to 6.7 million, with a monthly compounded change rate of -10%. The factors for the decline are as follows:

  1. One overall factor is China's slowing economic environment, further exacerbated by China's major winter snowstorm and Sichuan Earthquake;
  2. Existing SD (standard definition) DVD players sales are nearing saturation;
  3. Availability of high definition DVD players, such as Blu-ray discs, is still limited in China, and high prices also dampen demand, despite growing popularity of high definition TVs;
  4. Introductions of home theatre PCs (HTPCs) and personal video recorders (PVRs) threaten to encroach on DVD player sales.

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source: ccid consulting, July 2008

China's 1H08 DVD player revenues also declined to 3.33 billion Yuan, with a monthly compounded change rate of -10.06%.

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source: ccid consulting, July 2008

Downward price pressures continue unabated.

As prices go down, cost of manufacturing continue to go up, with the appreciation of the Yuan, raw material price increases, and export pressures. Vendors are targeting the low-end market, both in China and for export. As the low-end market heats up, Chinese domestic vendors also face DVD patent licensing fees, patents which multinational vendors own.

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source: ccid consulting, July 2008

In 1H08, DVD players price below 500 Yuan are the most dominant in China. High-end products, such as portable and recordable DVD players, had the largest price decreases, but this did little to affect their market share. Mid to low-end products will continue to be important, as China's growing Tier 3 and 4 cities are price sensitive.

1H08 DVD Player Price Segment Shipment Share

Jan

Feb Mar April May June

Below 300 Yuan

29.0%

28.85 29.2% 29.6% 29.8% 29.7%

300 399 Yuan

34.6%

33.0% 32.9%

33.5%

33.7% 33.9%

400 499 Yuan

14.7% 15.6% 15.4% 15.0% 15.3% 15.8%

500 599 Yuan

7.2%

7.3% 7.1%

7.1%

8.0% 7.8%

600 699 Yuan

5.4% 5.8% 5.6% 5.5% 4.3% 4.1%

700 799 Yuan

2.1%

2.4% 2.6% 2.2% 2.1% 2.0%

800 899 Yuan

1.1%

1.0% 1.1% 1.1% 1.2% 1.1%

900 999 Yuan

1.2%

1.2% 1.1% 1.2% 1.1% 1.0%

Above 999 Yuan

4.7%

4.9% 5.0% 4.8% 4.5% 4.6%

Totals

100.05 100.0% 100.0% 100.0% 100.0% 100.0%

source: ccid consulting, July 2008

New DVD player categories have formed.

In China, these include portable, recordable, Karaoke, and storage categories, with some helping to drive growth. Traditional shelf-top DVD players are still the mainstream in 2008H1, which accounted for 93.8% of total shipments. Thin, lightweight, portable DVD players, with its own LCD screen, enjoyed fast growth and were favored by younger Chinese consumers. By contrast, recordable DVD players, with its higher prices and relative lack of consumer awareness, had a very small shipment share.

1H08 DVD Player Product Category

Jan

Feb Mar April May June

Shelf-top Shipments

1,367,001

1,400,910 912,759 821,797 967,685 811,295

Portable Shipments

88,165

91,318 59,640

53,373

55,418 49,702

Recordable Shipments

3,543 3,249 2,936 2,985 1,584 1,412

Total Shipments

1,458,709

1,495,477 975,335

878,155

1,024,687 862,409

source: ccid consulting, July 2008

China's winter snowstorm and Sichuan earthquake affect regional sales.

This year's severe winter snowstorm and Sichuan earthquake negatively affected China's Central and East regions. Nonetheless, China's more developed North, East, and South regions continue to have majority shipment shares.

1H08 Shipments by China Region

Jan

Feb Mar April May June

North

339,952

372,375 23,2130 20,4611 26,9493 22,3364

East

328,209

323,023 21,7500

19,6707

26,1295 20,5253

South

321,748 324,518 21,6524 19,4950 23,7727 19,9216

Central

140,476

131,602 8,9731

8,1668

9,5296 8,0204

Southwest

110,172 104,683 7,1199 6,4983 2,4592 3,1047

Northeast

129,200

139,079 8,7780 7,9912 9,4271 8,0204

Northwest

88,952

100,197 6,0471 5,5324 4,2012 4,3120

Total

1,458,709

1,495,477 97,5335 87,8155 102,4687 86,2409

source: ccid consulting, July 2008

Consumer appliance stores are still the main channels.

Consumer appliance stores are still the primary channel for DVD players in 1H08. Other channels are being developed and have a growth trend, such as IT marketplaces.

 

1H08 Shipments      by Channel

Jan

Feb Mar April May June

General Merchandise

8.9%

8.5% 8.3% 8.0% 7.8% 7.5%

Consumer Appliance 

61.4%

61.1% 60.9%

61.2%

61.7% 62.8%

Shopping Mall

18.2% 19.2% 18.9% 19.3% 19.6% 19.1%

Others

11.5%

11.2% 11.9%

11.5%

10.9% 10.6%

Total

100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

source: ccid consulting, July 2008

Chinese domestic vendors lead the market.

For 1H08, BBK, Malata and Qisheng are still top three with strong advantages. In general, BBK has an overall strong product line. Malata focuses more on product differentiation, acquiring Karaoke technology early on and setting the bar for such product categories. Qisheng offers products with good quality at low prices.

Following close behind are also strong performers, such as Philips and Nintaus, as they look to improve their product positioning and channel development.

China's HD DVD formats will still need to have clarity.

Panasonic has made significant inroads to local Chinese production of Blu-ray products, and the company has alliances with Hualu to do the actual manufacturing. Other vendors are gaining the necessary licenses for Blu-ray.

However, the high definition DVD standards wars are still not settled yet in China.  China is developing a number of its high definition standards, such as EVD (Enhanced Versatile Disc), NVD (Net Video Disc), and CBHD (China Blue High-Definition), formerly known as CH-DVD (China High Definition DVD).

CCID Consulting expects that SD DVDs will still be the mainstream in China for the next three to four years.

For more information

Please contact us for these and other China-related data, information and products.

Unless otherwise specified, all information provided is sourced from CCID Consulting.

 
         
         
     

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