The Hindu Business Line : Philips plans to lead DVD surge

Speaking to Business Line here, the Manager (Audio Marketing - CD Systems), Mr Ritesh Jain, said the company intended to do this through three categories: DVD players, DVD-cum-music systems and DVD home theatres.

Mr Jain said Philips was the market leader in all these categories with a 50 per cent share each in the player and home theatre segments and a 43 per cent share in the DVD-cum-music system segment. Affordability would be an important component of Philips' strategy. Its DVD player prices start at Rs 4,990 while its recently-launched DVD-music system prices start at Rs 16,990. There are five models in both these categories. Philips has just launched the all-in-one FWD 390 which is a music system with in-built DVD technology and is positioned as the most affordable one-system solution for home entertainment.

According to Mr Jain, the desire to own the latest technology, easy availability of DVD software and falling prices will fuel growth in this category. To illustrate what he called the "exponential growth" in this segment, he said that in January-December 2002, all companies put together had sold 8,000 DVD players, while in December 2003 alone, they had sold 40,000 units. Philips had introduced its player in November 2003, he added, stating that competing products were still in the Rs 6,900 price range.

Around two lakh standalone VCD players are sold every month. Philips aims to convert around 50 per cent of this market into DVD buyers, Mr Jain said, adding that the price difference between VCD players and DVD players has narrowed to 30 per cent. In 2004, the market for DVD-music systems will grow to 40 per cent compared with 2 per cent in 2003, he said.

Philips plans an aggressive promotional campaign for its DVD products. Apart from a new campaign in print and on television, it will also hire `promoters' to demonstrate the products on shop floors all over the country. This is a new step for this industry, he said. The new campaign, which is likely to break on TV in April, will have `it plays anything, plays everything' as its theme. The advertising is handled by JWT.

Philips has a 45.8 per cent value share of the Rs 748-crore audio market which includes radios, hi-fi systems, stereos, monos, CD players, DVD products and home theatre systems. Its audio segment, which is looking at a 50 per cent growth, contributed half of Philips' consumer electronics division's Rs 700-crore turnover in January-December 2003.

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