Makers are edging out handheld configurations to explore the home entertainment and external storage sectors.
China suppliers of HDD portable media players are shifting focus from handheld to desktop confi guration, optimistic of the latter's better chances in the home entertainment and external storage segments. The high cost of hard drives and stability issues that undermine performance have hampered the technology's adoption in the PMP line, pushing makers to abandon it to fl ash-based units. The latter type represents more than 80 percent of local PMP output.
Under efforts to ensure market penetration, manufacturers are positioning HDD media players as replacements for DVD/VCD players, digital photo frames and portable hard drives. They highlight the product's recording, storage and playback capability, and connectivity to TVs, monitors and projectors. Many anticipate the strategy will raise exports by at least 10 percent this year.
At present, about 80 percent of China's total HDD media player output, including PMPs, is sent overseas, mainly to Europe. The other destinations are North America, Asia and Oceania. Suppliers are seeking opportunities in Central and South America, the Middle East, and other parts of Asia and Australia as well. The bulk of shipments are for OEM and ODM clients, and 10 percent under makers' own brands.
A high-growth line when the local industry began in 2004, PMPs started nearing saturation point even in developed economies when the global fi nancial crisis depressed demand in 2009. To boost sales, manufacturers turn to feature enhancements but even this proves challenging due to emerging converged products with comparable A/V handling capability. The strongest threat comes from Apple's iPhone, the popularity of which has spawned similar products, and mobile Internet devices. As a result, global shipments of PMP and MP3 players rose only by 5 percent YoY in 2009, with estimated volume at 225 million units, according to iSuppli. Between 2007 and 2012, the projected CAGR is lower at 4 percent, pointing to a steadily declining line.
There are more than 250 makers of PMPs in China and over half turn out HDD variants. The majority of operations are private ventures providing other electronic products such as fl ash MP3 players, car PMPs and HDD DVD recorders. Most companies offering hard drive-based units are from the external enclosure industry and joined in 2007. The supplier number will remain stable, with no anticipated exits.
Guangdong province is the line's manufacturing hub in China, accounting for about 80 percent of the country's total output. The greatest concentration of enterprises can be found in the cities of Shenzhen and Dongguan.
Other operations are spread over the provinces of Zhejiang and Jiangsu.
Products & prices
OEM, ODM highlighted
Taiwan: OEM & ODM market sustains industry
Midrange and upscale units form the bulk of the yield in China, although low-end models may also be sourced. The products have 1.8, 2.5 or 3.5in hard drives, with the last adopted in more than 90 percent of desktop media players. PMPs use mostly 2.5in HDDs and are available in 20GB to 2TB variants.
The selection is compatible with popular audio, video and image formats, and delivers high resolution. Aside from regular A/V interfaces, there are HDMI 1.3, USB 3.0 and 10/100Mbps Ethernet LAN ports and multicard slots.
Sunshine Electronics (HK) Ltd's ZF-H838 model designed to accommodate a 3.5in HDD adopts a Realtek 1073-DD chipset. The device supports 1080p, 1080i and 720p resolutions. It is compatible with MPEG-1/2/4, H.264, VC1, RM/RMVB, MKV, MTS, M2YD, TS, TP, TRP, AVI, MOV, VOB, ISO, DivX, Xvid and WMV videos. Audio playback covers MP3, WMA, WAV and Ogg Vorbis, with AC-3, Dolby and DTS supported. Images in JPEG, GIF, BMP or PNG format are enabled. The interfaces include HDMI 1.3, SD/MMC/MS, two USB 2.0, mini USB, 10/100Mbps Ethernet, SPDIF and Y/U/V.
Wi-Fi connectivity, DVB-T and Internet functions are typical value additions. Besides full HD 1080p playback, Shenzhen Mele Digital Technology Ltd's HMC-3916CGT model has DVB-T, recording and media library. It is compatible with various video formats, including AVI, DAT, MPEG-2, MPEG-4 SP/ASP, ISO/TS/IFO/VOB, MKV and RM/RMVB. The device supports 10/100Mbps Ethernet and 802.11b/g/n, with the wireless option enabled by a dongle. Buyers can source the 3.5in SATA HDD with up to 2TB capacity.
Low-end units capable of 720p or 1080i HD are priced from $18 to $30, while midlevel versions that can handle full HD or 1080p list at between $40 and $50. It is more than $60 in the high end because of added DVB-T, recorder, Internet and Wi-Fi capability.
Shenzhen Mele's selection of HDD media players is from $20 to $110. At Sunshine, quotes range from $62 to $70.
Prices will decrease by at least 5 percent this year after dropping 5 to 10 percent in 2009. Makers cite the continuing effects of the economic downturn and fi erce competition for such trend.
HDDs and chipsets are the key components of media players, with the former accounting for more than 35 percent of costs. Local suppliers turn mainly to Hitachi, Toshiba, Seagate, WD and Samsung for hard drives.
Sunshine is partial to Seagate, while Shenzhen Bluetimes Technology Co. Ltd sources directly from Samsung. The majority of China makers, however, keep buyer options open and provide the devices without HDDs.
Chipsets come from Realtek, Sigma Designs, ESS, Zoran, Silan and MStar.
Most local companies opt for the first, specifically the 1073 and 1283 variants, for their midrange and high-end devices. Such is the case for 60 percent of output in Shenzhen Bluetimes and Shenzhen Mele, while it is almost entirely the choice for Sunshine's selection.
Midte Industrial Co. Ltd differs and uses Silan chips for 60 percent of its HDD media players. Entry-level units typically employ ESS and MStar solutions.
As part of product development, nearly all suppliers stay abreast of advances in chipsets and adopt the latest. Some conduct further enhancements, which center on the software, to introduce value-added functions.
Shenzhen Mele has combined Internet radio and media library and search engine capability, and enabled remote access and control of the device through the Web. The company has a 30-member R&D department.
|OEM, ODM highlighted|
HDD media players from China are primarily produced for an overseas OEM and ODM client base, although there are suppliers that promote in-house brands. Midte is one such enterprise, exporting about 10 percent of output under its Midte label.
While they will continue to expand their reach abroad, companies such as Shenzhen Bluetimes and Shenzhen Mele are also growing their domestic distribution channels. The first in fact expects local sales to improve between 15 and 20 percent this year.
Shenzhen Bluetimes exports 95 percent of its HDD media players as OEM orders, with the bulk going to Europe and the rest to Australia.
Europe is likewise the main overseas market of Shenzhen Mele. Southeast Asia and the Middle East are the other destinations. All outbound shipments are ODM projects.
Small suppliers can produce fewer than 20,000 HDD media players a month, while it is between 50,000 and 150,000 for midsize and large companies. Shenzhen Mele averages 110,000 units out of a 150,000 monthly capacity.
In terms of in-house processes, the first group concentrates on assembly, testing and packaging. Bigger operations have SMT capability as well. Mold tooling and plastic injection are generally subcontracted.
Taiwan suppliers of HDD portable media players are sustaining product development endeavors despite decreasing global shipments and the continued dominance of Apple, Microsoft and Sony. The line is projected to represent less than 5 percent of total PMP deliveries worldwide in 2008-10, down from 18 percent in 2007, according to Market Intelligence & Consulting Institute.
Expecting at least no further local competition, the island's fewer than 10 makers are determined to leverage the small manufacturing pool to enlarge their OEM and ODM business. The major markets are Europe, Asia and the US. Hon Hai and Inventec are among Taiwan's major players.
At present, companies are concentrating on enhancing displays and increasing storage capacity further. The regular options for the fi rst are 3, 3.3 and 3.5in color OLED or TFT.
In the high end, upgrades go hand in hand with the added web browsing and gaming functions so 4.3in screens with 16:9 aspect ratio are widely adopted. Touchscreens and Wi-Fi connectivity complement the trends in this category. In some latest releases, support for H.264 compression technology is another major feature.
Vosonic Technology Corp.'s VP8870 model has a 4.3in color TFT LCD and delivers 800x480-pixel resolution. It has an A/V-out function and comes with a remote control.
Taiwan suppliers use mostly 2.5in hard drives for their larger storage and lower cost compared with 1.8in variants. To meet greater storage requirements, multicard readers are usually built in. Vosonic offers 320 or 500GB based on 2.5in HDDs.
As an added option, makers ship products without the hard drives, quoting $180 to $200 for those with 4.3in displays. Prices are $240 to $250 for units with a 2.5in 320GB HDD, and start at about $280 for 500GB versions. Input costs are stable, keeping quotes steady.
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