The world's CCTV digital video recorder (DVR) supply is forecast to grow by at least 37 percent in 2006 as makers in key sourcing centers — mainland China, Hong Kong, Taiwan and South Korea — ramp up output. The aggregate shipments of surveyed makers will rise to 17.4 million units in 2006, from 12.7 million units in 2005.
The industry in mainland China alone is expected to achieve 70 percent growth, with a projected US$139 million in export sales compared with US$82 million in 2005.While up to 70 percent of world DVR supply is attributed to Taiwan and South Korea, the product's traditional manufacturing hubs, mainland China is emerging as a significant sourcing center. Mainland China's supplier base has grown over the past few years and is now estimated to be 200-strong, a size similar to that of the industries in Taiwan and South Korea. While only 5 percent of mainland makers have the capability to develop advanced coding and decoding algorithms and software, most mainland makers are keen on developing this capability to gain more of the market in Asia.
This report covers 47 DVR suppliers: 27 from mainland China, nine from South Korea, eight from Taiwan and three from Hong Kong.
These companies provided manufacturing, export, sales and product development information and forecasts from which Global Sources derived these key findings:
• Mainstream DVRs feature MPEG-4 compression technology, while more advanced units adopt H.264. Entry level units feature early generation codecs such as M-JPEG and MPEG-1/2 and support fewer channels.
• Standalone DVRs comprise the bulk of output, followed by DVR cards and various other types of DVRs. The latter includes PC-based, mobile and automatic teller machine (ATM) units. Digital video servers (DVS) complete the DVR line of some makers.
• Most companies focus on OEM and ODM exports.
• Makers plan to increase output from 10 percent to 50 percent.
• Prices are anticipated to decrease by 5 percent to 30 percent.
• With Europe as a major destination, makers face the challenge of meeting the requirements of the Restriction on Hazardous Substances (RoHS)and the Waste Electrical and Electronic Components (WEEE) directives. Compliance means upgrading production lines, training staff and identifying suppliers of lead-free components, among other considerations. While all makers aim tobe RoHS-compliant by the directive's effectivity in July 2006, some makers are still in preparation stage.
The Industry Background section of the report discusses the industries in mainland China, Hong Kong, Taiwan and South Korea. It identifies manufacturing hubs and describes the types of makers in these areas.
The Manufacturing Capability section discusses typical production processes for DVR manufacture and identifies which of these steps is done in-house or outsourced. It enumerates the QC tests undertaken by makers prior to shipment. Key components and their costs are discussed in this section.
Products and Prices discusses the features and functions of DVRs on offer from the surveyed makers, pointing out some key specifications of mainstream and high-end units.
The Outlook section presents forecasts of surveyed makers on their output, export and sales performance. Price forecasts are also presented. This section also outlines the R&D priorities of the companies. Plans regarding capacity expansion, including the setting up of new production facilities and purchase of additional equipment, are provided in a table.
Industry Overview
South Korea and Taiwan are still the primary production centers for DVRs, accounting for 35 percent to 40 percent and 25 percent to 30 percent, respectively, of world supply. These figures are based on estimates of industry sources in Asia, since official statistics are not available.
The global CCTV digital video recorder (DVR) market was worth US$4.3 billion in 2005, registering growth about 16 percent from US$3.7 billion in 2004, according to statistics from the Electronic Industries Association of Korea (EIAK).
South Korea has about 150 DVR makers that focus on OEM and ODM business. Taiwan has a little over 200makers comprising 20 that specialize in standalone DVRs, and about 200others that focus on PC-based units.
Mainland China is challenging the traditional DVR leaders in Asia, with a growing supplier base currently estimated at 200 companies.
While the mainland only began to export DVRs in 2003, its actual experience in the line dates back to 1999, when some companies commenced DVR production. This was two years after South Korea commercially launched the product in Asia in 1997.
Despite mainland China's relatively limited DVR export experience, the industry on the mainland is bullish. Makers are looking at US$139.2 million in export sales in 2006, a 70 percent increase from the US$81.9 million achieved in 2005.
The growth of Asia's DVR sector has been steady, with the industry bolstered in recent years by newcomers coming from the CCTV camera, CCTV monitor, industrial PC and computer graphic card lines.
There is a trend in the line toward improving technological capability given that compression algorithms — MPEG-4 and H.264, among others — and system reliability are key features that distinguish DVRs from one another.
Supplier Profile
Beijing BlueStar SoftWare Technology Development Co. Ltd
Since it was established in 2000,Beijing BlueStar SoftWare Technology Development Co. Ltd has been developing, producing and exporting CCTV DVRs. At present, the company offers a wide range of standalone DVRs and ATM DVRs.
Its headquarters, which also house sits sales department, is located in downtown Beijing, mainland China. Its production facility is just a 50-minute drive from the head office.
At its establishment, BlueStar invested US$270,000 in its factory and manufacturing equipment. It investedUS$180,000 in equipment in 2005, and another US$200,000 is budgeted for this purpose in 2006. The maker also plans to add another assembly line to increase monthly output by at least 30percent in 2006.
In 2005, BlueStar sold US$15 million worth of CCTV DVRs to overseas customers and the domestic market in mainland China.
In 2006, the company projects annual sales and export revenue to increase by 30 percent and reach US$20million and US$2 million, respectively.
The maker indicated that it supplies more than 85 percent of mainland China banks with standalone and ATM DVRs. Owing to the large domestic market share of ATM DVRs, nearly 90 percent of releases are targeted at the mainland market.
In 2005, the maker sent 50 percent of its exports to Western Europe and30 percent to North America. Fifteen percent was distributed in Middle and South America, Southeast Asia and Australia.
OEM orders take about 55 percent of exports while another 15 percent are for ODM orders. The remaining30 percent are exported under the company's own Trendline brand.
Manufacturing Capabilities
BlueStar Technologies handles cosmetic design, technical development, painting and final assembly in-house. It outsources moldmaking to Dongguan suppliers andSMT to its partner in Beijing.
BlueStar prefers to have its factory and headquarters in the same city to ensure effective QC and smooth communication between its R&D center and production facility.
The maker has a total of 170employees including 50 production workers housed in its ISO 9001-certified 1,000sqm factory.
On the first floor of the factory, two workers operate a 10sqm repair workshop. A BGA rework station is on the same floor. PC cards are heated here for eight or 12 hours before being sent to the assembly line. The workshop is also equipped with a Samsung monitor and one SS-6300 Synchroscope.
The final assembly line is on the second floor of the facility. At the head of the line, a worker tests single side PCBs. Twenty-five other assembly line workers complete the line. Two PCB assembly lines, also located on the same floor, are each operated by seven workers.
All this column of information contained in China Sourcing Reports is the result of original, independent and impartial research conducted by Global Sources analysts.
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