We had the opportunity to talk to Sony Optiarc's European marketing director Ralf Wolf during this week's Computex show in Taipei, and the meeting revealed some interesting insight into the current state of the ODD business as well as upcoming Blu-ray developments. Clearly, the crisis hit hard on Sony Optiarc and other players on the optical market, but the firm perceives the crisis as a chance to purge this overly competitive market. Times in which market share stands above profit seem to be over. Sony seems to share this belief, as it took over NEC's 45% share in September of 2008, making the joint venture a wholly-owned subsidiary of Sony.
Blu-ray Technology Roadmap
"From a technology standpoint, Blu-ray is not a big deal anymore", Wolf said. The technology is considered fully mature by now, as all upcoming improvements are laid out in the latest specification. "We will of course see speed bumps like we it was the case with DVD technology a few years ago". In addition to that, many users probably wonder about future capacity options: Blu-ray technology is currently available with single and dual layers, each storing 25 GB (23.3 GiB). Future Blu-ray products can be based on three or four platters, effectively doubling the capacity. Up to six layers are technically feasible on Blu-ray.
Optical Storage vs. Hard Drives
Since hard drive prices are extremely low, we wondered whether or not Sony Optiarc considers convenience storage products such as cheap external hard drives a threat or an option to optical storage. "Blu-ray is already well established in professional markets, and it is a matter of time until BD products will finally reach low mainstream price points. We believe that there will be a coexistence of both technologies for many years to come". We can confirm this statement by the fact that some higher end NAS servers (network attached storage) are being equipped with additional Blu-ray hardrive to upgrade the capacity by 50%, or to add an on-line backup solution to the NAS device.
Is Blu-ray Media Cost Coming Down Now?
Ralf Wolf is confident: "Verbatim was the first to introduce LTH BD recordables, which represent a significant step to reduce cost for recordable media." LTH stands for "low-to-high" and basically means producing Blu-ray discs exactly like DVDs - pressing several layers from the top down. Current BD media production processes work the other way around and had required new production processes and tools. With LTH production, media manufacturers can actually reclycle most of their tools they've been using for DVD recordables, which, Sony Optiarc hopes, could finally bring down cost. "Cost could certainly have come down much earlier, but the crisis turned the market upside down."
What's Next? Maneuvring During the Crisis
Wolf said that the crisis hit the ODD business very early and very hard, as a large amount of drive orders was cancelled in late 2008. Part orders by Sony Optiarc and others were effectively almost cancelled and "it wasn't until early 2009 that momentum returned." In the next step, the incoming orders exceeded the remaining production capacities, which then created a shortage. And since the crisis is not over yet, demand comes and goes in unpredictable waves. "Only those who can manage these waves of tide and flood in market demand and handle part orders as well as inventory efficiently will do a good job in maneuvering during this heavy crisis." wolf smiled.
Next Stop: BD Recordables for Notebooks
Sony Optiarc is confident to see a stronger second half of 2009, also because of the next product generation that is coming up: "Expect to see more and more notebooks with built-in Blu-ray burners". Initially, BD recorders will add at least $150 to a notebook's retail price, but since BD recorders are one of the few differentiation features for notebook vendors, we expect a quick adoption in the upper mainstream and high end segments.