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Digital entertainment revolution in consumer electronics

Posted: 08 Jan 2003 ?? ?Print Version ?Bookmark and Share

Keywords:digital electronics? dvd? personal video recorders? tv? vcr?

Terry Leeder

SVP, Sales & Marketing, Cirrus Logic

In the past several years, as the global semiconductor market experienced extreme turbulence, the digital entertainment chip segment bucked the trend of highs and lows and has afforded outstanding growth, with DVD players, home theatre systems, and portable audio as important drivers. According to Gartner, semiconductor consumption for DVD players in the Asia-Pacific region is expected to grow at a CAGR of 18.3 percent over the next five years, and digital STBs at a CAGR of 17.2 percent. Compare this with traditional consumer electronics leaders such as TV having a projected growth of 1.9 percent and CD players at 3.2 percent.

Looking into 2003 and beyond, the digital entertainment space is seen to continue growing, with expectations of around 30 percent. At the heart of the growth is DVD, which has been the fastest growing consumer entertainment product in history. But DVD's most interesting story is not where it has been, but where it is going.

New markets for DVD-based systems that capitalize on trends in digital entertainment will experience tremendous growth, creating excellent opportunity for component and semiconductor vendors, not only in mainland China, a leader in DVD player manufacturing, but also for manufacturers in Korea and ODM/OEM players in Taiwan. The integration of digital video and audio solutions are opening up the digital entertainment market beyond audio-only or video-only devices.

These new DVD products will spark the next big revolution in digital entertainment, as consumers around the world replace their aging VCRs and leap into the digital domain for storing and accessing the relatively untapped world of digital content.

Within these new DVD market segments, a wide array of consumer features will arise, enabling greater accessibility, command, and control over digital content like never before seen. At the vanguard of these products will likely be devices such as personal video recorders (PVR) that not only will digitally record content such as TV shows to a hard drive but will also offer "jukebox" services, in essence serving as the command console for consumers' digital music and video files.

These new segments of DVD-based digital entertainment are allowing Asian manufacturers to move past the commoditization issues while still being able to distinguish themselves to consumers on factors other than price. To capitalize on the digital entertainment revolution and convergence of audio and video chip solutions, semiconductor vendors will have to integrate audio and video capabilities to provide scalable platform solutions for these emerging DVD-based markets.

These solutions can deliver tremendous time-to-market advantages for Asian manufacturers, allowing them to minimize development expenses while stimulating these new DVD market growth segments. To serve this market in the future, the winning semiconductor companies will be those who can supply all the necessary audio and video technologies cost-effectively.

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