Crystal clear picture, crisp sound and... 'fantastic' prices
Philips, one of the world's main consumer product makers, opened its first Asia Pacific digital video disk (DVD) manufacturing facility in Singapore on March 25. The company used the occasion to discuss its marketing strategy in the Asia Pacific and DVD's prospects in the region. The Jakarta Post reporter Pandaya attended the event and filed this report.
SINGAPORE (JP): Digitally crisp sounds, crystal-clear pictures and a vast range of features. You no longer have to leave home to enjoy your favorite movies or music concerts. Now they are all at your fingertips.
Philips' digital audio-video products give consumers all the comfort and enjoyment modern technology has to offer.
To maintain its position in digital technology, Philips has launched a range of products, ranging from video compact discs (VCDs), DVD players, high-definition televisions and plasma televisions.
Philips began marketing its DVD players last year. The multistandard DVD-820, which plays both audio and video compact disks (CDs), appeared in 1998. The DVD-860, produced later in the same year, boasts features like built-in AC3 decoder and a three- dimensional virtual surround sound system which provides a cinema-like sound system.
Philips latest model is the DVD-725, which is available in some countries in the Asia Pacific. This model, which has digital output for multichannel audio signals, is expected to be introduced to the Indonesian market in a few months.
To back up its DVD marketing across the world, Philips has introduced flat plasma TV to create a home cinema. It also makes a 65-inch, high-definition projection TV to receive digital broadcast for the U.S. market. The price is steep, especially by Indonesian standards.
Consider the prices quoted by Cosmas Subagus, a senior executive at Philips Indonesia. The DVD-725 costs some Rp 4.5 million, the speaker set between Rp 5 million and Rp 80 million while the Digital Theater Sound amplifier costs Rp 20 million.
If you think your television is just too dated and you cannot resist the temptation of a high-resolution flat plasma television, it will cost you another US$15,000 (about Rp 133 million). Or maybe you want the monstrous 65-inch projection TV. This will cost you "only" $10,000.
It is hard to find flaws in the system's cinematic sound quality. It would be really enjoyable if your house was spacious so you could set aside a sound-proof room to serve as your home studio. But if you live in a modest housing complex where houses are close together, you would probably want to think twice before deciding to buy the system.
In crisis-hit Indonesia, while VCDs are extremely popular, DVDs are relatively unknown, although Japanese brands such as Pioneer and Panasonic have aggressively advertised video players which can play DVDs, VCDs, laser discs and audio compact discs.
DVDs are still hard to find at video rental stores. Also, DVDs are much more expensive, about Rp 400,000, than VCDs, which you can buy for about Rp 60,000. In some places in Jakarta, pirated VCDs are sold for a mere Rp 12,000 or less.
Cosmas said Philips, like other brands, had its sales in Indonesia badly disrupted by the crisis. Only some 600,000 TVs of all brand names are expected to be sold this year and the company is hopeful Philips will contribute 3 percent of the total sale.
In Indonesia, the Amsterdam-based Philips -- which employs 233,700 people worldwide -- is better known for its household appliances, including lamps, rice cookers, blenders, hair dryers and irons. Its TVs, video and audio products, which are generally more costly than Japanese-made products, are purchased mostly by the middle and upper classes.
Rob Savelkoul, general manager of Philips' digital video business in Asia-Pacific, said it would take several years until Indonesia is politically stable enough to recover its economic strength. Only then can Philips expect to regain its business position in Indonesia.
"It's a difficult situation for everyone," he told The Jakarta Post.
Icon
It is predicted that DVD will be the icon of the digital age. DVD offers 17 gigabytes of data, providing eight hours of movies or 1.5 days of music.
Liew Hen Sang, Singapore's managing director of the economic development board, said that DVD would become the medium of the future and as ubiquitous as VCR and CD players.
"Almost all movie studios are now producing DVD content for the marketplace. With the increasing availability of DVD titles and attractive pricing, the DVD industry will flourish," Liew said.
Independent researcher Dataquest predicted the worldwide production of DVD players would rise threefold to 6 million units this year, up from 2.2 million units last year.
It also is believed resolving the software piracy issue would allow the DVD to sweep the global market in the years to come.
Philips DVD manufacturing facility in Tao Payoh, Singapore, will manufacture DVD players for sale around the world.
Philips officials say the DVD market in the Asia Pacific is growing as fast as the market in the United States and even faster than the market in Europe.
Singapore, Hong Kong and Taiwan are said to be the strongest markets for DVD at the present, with the equipment hitting the mass market. Australia, New Zealand, Thailand and China are seen as growing markets.
In China, according to Calvin Goh, the product manager of Philips DVD, DVD sales are expected to reach one million units this year and are projected to hit 7.7 million units in 2001.
"We intend to remain the dominant player in China, the Philippines and New Zealand, building further on our already strong position... In all other markets we intend to remain among the top three manufacturers and where possible to consolidate and further strengthen our market position," Goh said.