Philips Gears Up to Ship One Million CD-RW Products Per Month; Market Expected to Grow to 35 Million Units in 2000

Edge: Work-Group Computing Report, Nov 22, 1999

Philips Electronics Wednesday unveiled plans to increase manufacturing capacity of CD-RW products to exceed one million units per month by the middle of next year. The increased output will be accomplished through further output growth in its production facilities in Hungary and through additional expansion in Asia Pacific. The market for CD-RW drives is projected to grow from approximately 15 million units this year to 35 million drives in the year 2000.

"Since the launch of the format in 1996, the CD-RW market has experienced tremendous growth," said Robert van Eijk, general manager, Philips Optical Storage North America. "CD-RW has become the data storage and interchange medium of choice in the PC, with attach rates of more than 50 percent in some consumer channels." The CD-RW platform was developed and pioneered by a group of six companies including Hewlett Packard, Mitsubishi Chemical, Philips, Ricoh, Sony and Yamaha.

Philips is the leading manufacturer of CD-RW drives and sub-assemblies worldwide and the CD-RW partner of choice to many of the top 10 PC manufacturers.

"Dataquest predicts that CD-RW, or its follow-on combination CD-RW/DVD-ROM drive, will be the dominant high capacity rewritable removable storage device in PCs within a few years", said Mary Craig, principal analyst, Gartner Group's Dataquest, in her November 1999 report, "CD-RW---The Dark Horse". "This will be succeeded ultimately by rewritable DVD by the end of the next decade."

The industry has an installed base of more than one billion CD players (275 million CD-ROM drives and 800 million audio-CD players). Nearly three billion CD-Recordable and CD-RW media are expected to reach consumers in the year 2000.

"When users think of creating their own CDs, compatibility and data interchange within the CD and DVD family become a major consideration when buying a PC today," van Eijk said. "We expect online distribution to drive the need for CD-RW further, since people like the idea of collecting and storing data and software on a Compact Disc."

Philips Optical Storage is a Business Group of Royal Philips Electronics that develops and manufactures industry-leading optical storage products for sale through OEM channels worldwide. Optical Storage product lines include drives, subassemblies and components related to Audio and Video CD, CD-ROM and ReWritable products in CD and DVD technologies for both consumer electronics and data markets. Philips Optical Storage conducts extensive product development activities in Belgium, the Netherlands, Singapore, China and the United States, and operates manufacturing facilities in Belgium, Hungary, Malaysia and China.

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of US$ 33.9 billion in 1998. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 230,700 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, medical systems, business electronics, and IT services (Origin).