Network media players

	The HMC3907 from Shenzhen Mele of mainland China is an HDD DVR with 750GB memory capacity, DVD-quality video recording and D1 resolution.

New entrants expand small supplier base in Taiwan and mainland China.

Hard drive-based digital video recorders (DVRs) have a long way to go before reaching mass-market stature, but growing demand worldwide is stoking the supply markets in Taiwan and mainland China. The supplier population in both regions is growing, with mainland China makers projecting that there will be 30 active players on the mainland by end-2008. Production, export and sales volumes are expected to start rising: Mainland China makers project a 50 percent rise in sales this year, from no more than 5,000 units sold in 2007.

In Taiwan, makers from various backgrounds are joining the fray. Newcomers include suppliers of multimedia storage devices, in-car entertainment products and security equipment. Makers with experience in MPEG-4 compression technology are also trying their luck in the hard disk drive (HDD) DVR market. The diversity in background and technical expertise is fueling the development of multifunction HDD DVRs.

Available HDD DVRs in Taiwan combine digital photo albums and multimedia players. A few models have security functions. Flash-based DVRs are the staple in mainland China, but the few models based on HDD feature 3.5in SATA HDD and multiple card readers. Advanced models have Wi-Fi and network storage functions.

High prices remain the single major factor that could delay the adoption of HDD DVRs. Demand remains small in some regions, such as the US where set-top boxes already integrate recorders, and Asia, where users are not keen on recording functions. Yet, industry watchers noted rising global demand for HDD DVRs and personal video recorders (PVRs). This rising interest is spurred by the surge in the supply of portable and mobile devices based on HDDs.

Nevertheless, makers from Taiwan and mainland China handle most production processes in-house for their HDD DVRs. A few suppliers noted an increase in their HDD DVR production in recent months.

Makers of DVRs in mainland China are clustered in Guangdong, in particular in Shenzhen and Dongguan. Most of these companies produce midrange models in order to improve their standing in the export market. One of the leading makers of HDD DVRs in mainland China is Shenzhen Mele Digital Technology Ltd, which started focusing on HDD models only last year.

Shenzhen Mele, which specializes in portable media players (PMPs), has a 1800sqm factory equipped to handle SMT, assembly, testing and packaging in-house. The company also handles R&D and marketing activities.

Shenzhen Mele can make about 100,000 HDD DVRs a month. Its actual monthly production averages at 50,000 units, a 50 percent increase over its 2007 monthly output.

One Audio Digital Ltd manufactures digital photo frames, PMPs and computer peripherals. The company’s factory has a total land area of 4000sqm and handles SMT, assembly and packaging in-house. Its monthly capacity for HDD DVRs is about 10,000 units. This year, the company estimates its monthly output will reach about 2,000 units.

G.Credit Industrial (Shenzhen) Co. Ltd makes LCD TVs and cordless phones, and in 2005 expanded into HDD DVRs. The company has a 60,000sqm factory with 100 production lines equipped to conduct all processes in-house. In 2008, the company’s production capacity for HDD DVRs is 10,000 units a month, which can support an actual monthly output of 2,000 units.

Taiwan’s Vosonic Technology Corp. has two subcontracting factories. Vosonic’s capacity for HDD DVRs—including PVRs—is about 5,000 units per month, with an average monthly output of about 3,000 units.

Vosonic’s product range covers multimedia entertainment products and surveillance systems. The company has a factory in Hsinchu, northern Taiwan, with a workforce complement of about 250. The company recently set up a design house in mainland China for software development. It also has an R&D department in Taiwan. The factory has three assembly lines and about
80 percent of its production equipment is fully automated.

Dynamic System Electronics Corp. has a 1529sqm factory in Sanchung, Taipei. This ISO 9001- and ISO 14001-registered factory houses six production lines, with three dedicated to manufacturing and the other three to assembly work. The company subcontracts other processes to outsourcing factories in Taiwan, especially during tight deadlines. Dynamic System recently introduced its new HDD-based DVRs and the company estimates its manufacturing capacity this year at 3,000 units a month.

Dynamic System is also a major supplier of flash memory cards, card readers, HDD enclosures and USB drives. The company is certified by Sony as a Green Partner.

JJPlus Corp. Ltd specialized in producing RF and microwave hybrid modules before it ventured in manufacturing DVRs. The company has a head office and R&D department in Taipei, and a design center and ISO 9001:2000-registed manufacturing facility in mainland China. It also has a sales branch in California.

Most of mainland China’s makers of DVRs supply models based on flash memory. The few suppliers of HDD-based DVRs have HDDs in their product lines and thus are able to expand into this segment much more easily. These makers are capitalizing on the large storage capacity of HDD models to boost their market positioning, and are looking to improving the recording performance of their products.

Most models come with 3.5in HDDs, with storage capacity growing to support as much as 750GB memory in some cases. Some suppliers integrate wireless, network storage, card reader, DVB-T and other value added.

Shenzhen Mele supplies HDD DVRs that support Wi-Fi, high definition and network storage. The company has released five HDD DVR models, and is planning to launch four more models this year. These new releases will emphasize network storage function. The company produces mostly midrange and high-end models. The HMC3903, for instance, is a home multimedia center with a changeable 3.5in 750GB SATA HDD and DVD-quality video recording. It supports D1 resolution at 720x480 pixels at 30fps or 720x576 pixels at 25fps. The unit has a 3-in-1 card reader supporting Secure Digital (SD), MultiMediaCard (MMC) and Memory Stick (MS) with 1-button backup, as well as Ethernet switch functions. It features Y/U/V HD output at 720p/1080i and SPDIF optical output. It supports movie, music and photo playback. The unit can also support video streaming.

One Audio started to focus on HDD DVRs in early 2007 and has since released two models. The company targets the midrange segment. This year, it plans to release two more new models incorporating card readers and more ports. It will put more focus on 3.5in models this year.

The company’s DVR3504 features a 3.5in SATA HDD with 500GB storage capacity. It supports CompactFlash (CF), MS, MMC and xD cards. It is compatible with MPEG-4, MPEG-2 and MPEG-1. It supports PAL and NTSC, and FAT16/FAT32 file system. Its software can be upgraded online.

G.Credit will release two models of HDD DVRs this year. Its R&D focus is on enhancing the quality of its HDD DVRs for the midrange segment. G.Credit has 3.5in units with card readers, IDE/SATA ports and DVB-T receivers.

The DVR100 supports a 3.5in IDE HDD and USB 2.0/1.1. It features intelligent power management for HDD, scheduled recording, document management, external text subtitles and music jukebox. The unit supports USB 2.0 and USB 1.1, and reads SD, MMC, MS PRO and CF cards. The DVR100 supports FAT32 file system; MP3, WAV and AAC; and multiple languages.

Mainland makers forecast at least 8 percent increase in prices of HDD DVRs this year. Low-end models are currently priced from $60 to $75 each. HDD DVRs with 250GB to 500GB storage capacity start at $200 per unit. Comparatively, flash-based DVRs are priced $75 to $105 in the midrange sector and $105 to $140 at the high end.

In response to trends toward multifunction DVRs and PVRs, more companies in Taiwan are integrating more features and functions into their products. Several companies, such as Dynamic System, are focusing on improving storage capacity, while suppliers such as JJPlus have developed models that incorporate security surveillance system.

Vosonic combined digital video recording, digital photo album storage and music player functions in its VP5700. Its storage capacity can be extended to 250GB. It has a 3.5in LCD monitor.

Another model from the company, the VP8360, features an AV-out jack for the recording of TV programs. It supports a 2.5in HDD with a storage capacity of 20GB to 160GB. The model can also save data and files using flash memory cards, such as CF, MS PRO, SD and MMC.

Both the VP5700 and VP8360 support MPEG-4, MPEG-2, MPEG-1, M-JPEG and Xvid.

Vosonic is looking to integrate security features into its DVRs and PVRs.

JJPlus offers the PV-690S portable DVR, which has a detachable 2.5in HDD with a storage capacity of 20GB to 80GB. The model also works as a video player, music player, digital photo viewer and motion detection recorder. It has a 3.5in built-in LCD monitor and records 720x240 pixel MPEG-4 video at 30fps.

Dynamic System’s newly launched HDD DVRs explore the multifunction trend by combining digital photo viewers and music players. With its experience as a storage system maker, the company is able to produce DVRs with a storage capacity of up to 320GB using 2.5in HDDs. Models with 3.5in HDDs support a maximum data storage of up to 1TB.

To provide extra security to stored video and audio files, the company has optional software for data encryption. For models with this feature, users may set password protection.

The company’s DVRs are targeted at the midrange and high-end segments.

Makers in this line are generally outward-looking. Mainland China makers ship their products to Europe, the US, Asia and the Middle East. This year, mainland makers expect to ship about 85 of their products to overseas clients, especially in Europe.

Shenzhen Mele generated $9 million last year from export sales of HDD DVRs, accounting for 50 percent of its annual sales from this line. It caters mostly to ODM and OEM clients but has launched its own label, Mele. One Audio exports almost 100 percent of its products, mostly to Europe and the Middle East. About 90 percent of G.Credit’s output of HDD DVRs goes to OEM clients, and the rest ships to ODMs. Taiwan’s JJPlus exports to the US, Europe, the Middle East and Asia.