For DVD+RW, Another Delay; For DVD-RAM, A Surprising Design-Win.

Hewlett-Packard has decided not to introduce DVD+RW until at least the end of 2000. "We said in June that we would bring it out in 1999, but we won't," admitted Sharron Viger, strategic industry marketing manager at HP's Colorado Personal Storage Solutions (CPSS) division in Loveland, CO.

Specifically, what HP is dropping is the 3GB drive that was first announced in 1997, but which has never come to market. Instead, HP will focus on a 4.7GB drive.

"We expect to bring that out in 12-18 months," she told me in November.

A consortium of drive-makers--Philips, Sony, HP, Yamaha, and Ricoh--and the Verbatim-brand media-maker, Mitsubishi Chemical Corp, developed the DVD+RW format. Yet, apparently, no drives have been manufactured in quantity, since jukebox developers I've talked to say they have never even received one for evaluation--not from HP, nor from any of its partners.

"We haven't shipped any sample drives," she acknowledged, "and have decided not to ship any. We've stopped the manufacturing process." Last June, the drives were promised for end-of-year delivery at a retail price of about $700. Asked whether any drives were made but are now in storage, she said, "I can't disclose that."

Ricoh Picks DVD-RAM 

Ricoh is one of the DVD+RW partners, but the next important product from its Network Office Solutions division will incorporate a DVD-RAM drive--the chief competitor to DVD+RW.

In 2000 Ricoh plans to release a departmental or small-office/home-office appliance called eCabinet. It's a "thin" server optimized for document image management and intended for attachment to digital photocopiers, scanners and fax machines, and especially to multifunction devices that incorporate all three I/O devices. Preliminary specs call for the eCabinet to have an 18GB HDD inside, but for exchanging media among users, it will also have a DVD-RAM drive.

Already manufactured in volume by Panasonic and Hitachi (Toshiba, their partner and chief patent-holder, is not yet producing drives), DVD-RAM has had a two-year head start in the market. Where DVD+RW was specified to store 3GB on single-sided disks, DVD-RAM drives use twosided media with 2.6GB/side capacity. A 4.7GB/side, backward-compatible drive is promised for mid-2000 delivery. Developers of CD jukeboxes have found it relatively easy to install DVD-RAM and Ricoh expects that eCabinet users will, in fact, store-and access recorded media in DVD-RAM jukeboxes.

The Ricoh spokesmen I talked with were candid about their company's decision. "DVD+RW isn't ready yet," one told me, "and DVD-RAM is. We had to go with what we could get."

No Critical Mass

"Other companies will make their own decisions," was Viger's response to the news about Ricoh. "For HP, this was strictly a business decision. We reviewed the market conditions. We looked at the installed base of DVD-ROM readers and video players, and found there's no critical mass yet, although we expected there would be, by now. We used International Data Corp.'s numbers. They predicted a 15-20 million installed base of DVD-ROM readers by the end of 1999 and a healthier jump by end of 2000 to 50 million. There is only a small, limited potential for a 3GB storage product now. So we believe it's best for us to refocus our efforts until market conditions are better: that is, until there are more DVD-ROM readers and DVD-Video players in use. We also believe that those customers will want a storage device that can share, as well as store, data, so compatibility with DVD-ROM readers is the key issue for us."

"Compatible" With What?

Compatibility with DVD-ROM imposes a technical challenge, however. Today's readonly drives can read only two kinds of DVD media: factory replicated disks and write-once DVD-R disks, i.e., those recorded in Pioneer's $5,000 DVD-R drive, whose reflectivity and track geometry are similar to those of replicated media. They cannot read DVD-RAM disks. Our 4.7GB design is comparable to that of DVD-ROM and DVD-Video media. At least, it's more like those than our 3GB media was," Viger told me. "We're aiming for full, drop-in compatibility."

That's the holy grail; but what's not yet clear is whether 4.7GB DVD+RW disks--when they arrive--will be compatible with today's DVD-ROM readers and DVD-Video players, or whether they will impose a requirement on manufacturers to alter their read-only drives in some way to accommodate rewritable media.

Remember what happened when the rewritable CD-RW format was introduced in 1996; for CD-ROM drives to read CD-RW disks, they needed "MultiRead" circuitry. So the CD-RW format's developers, Philips and Sony, began making only MultiRead CD-ROM drives and kept the licensing fees to a minimum. It became economically attractive for other manufacturers to follow suit and, today, all CD-ROM readers that run at 8X speed or faster (the majority of the installed base, by now) are MultiRead-compatible.

Looking ahead to 2001, Viger said, "We expect DVD drives that will be on the market then to be compatible with DVD+RW. We won't introduce 4.7 [the 4.7GB DVD+RW drive] until the market conditions are right-until there's a critical mass. Our 4.7 has been designed to be drop-in compatible with drives that are shipping today. We will require no modification of read-only drives."

If that were possible today, there would be no reason not to rush 4.7GB DVD+RW drives into production immediately and, thereby, establish their competitive advantage over DVD-RAM. Yet, presumably, it is that requirement which will take 12-18 months to accomplish.

The DVD-RAM developers, by the way, make no such claim for their 4.7GB format. Instead, they are starting to make branded DVD-ROM readers that can read DVD-RAM disks and are lobbying other drive makers to do the same, citing the installed base of DVD-RAM as evidence for potential demand.

Reading The Numbers Two Ways

I asked Viger if the installed base of DVD-RAM were a factor in HP's decision. "Look at the number of drives they're shipping," she replied. "We believe they're well under the critical mass with fewer than 10,000 units a month. That's a slow shipment for a rewritable DVD product," she concluded.

It's possible, however, to draw a different conclusion from the same 10,000/month figure. At, say, $400 OEM for each ($799 retail) drive, there is a revenue stream of some $4 million a month. That may not give the manufacturers a profit, but it does count for something against their costs-of-materials and their R&D budgets. The DVD+RW developers, by contrast, have yet to recoup any of their expenses through sales.

Still, HP's decision to skip over 3GB and focus on 4.7 is the only logical response to the facts. (Indeed, I predict that by the time you read this, -other DVD+RW partners will have announced similar changes in strategy.)

"We think that customers want higher capacity than 3GB," said Viger, "and we recognize that [650MB] CD-RW technology is already meeting most mainstream users needs for storing and sharing information. Given the delay in DVD reader growth and HP's leadership position in CD-RW, that's what we will build on."

Making DVD+RW More -ROM-like

Throughout 2000, Hewlett-Packard's R&D teams will be working to change the characteristics of 4.7GB DVD+RW media from those they'd developed for 3GB media. "We have created a specification that is physically compatible with dual-layer, replicated DVD-ROMs, and have added defect management in such a way hat it will not impact the logical constraints of read-only drives," said Sharron Viger. Specifically:

* Reflectivity, too low in the 3GB version, will be boosted to match that of dual-layer replicated DVD-ROMs

* Track pitch will be reduced approximately eight percent and written mark size will shrink by about 32 percent

* In lieu of a 2KB "linking section" to connect file segments, the 4.7GB rewritable media will employ "linkless" editing

* In 3GB media, part of the lead-in was embossed and part was written; but, in the 4.7GB media, there will be no embossed area of the lead-in

* The user data will start at the PSN 30000h address, instead of at PSN 31000h

* Defect management will be handled transparently to support DVD-ROM drives that are not "defect management aware"