History (1994): 63% Growth for WW CD-ROM Market From 1993 to 1994

“CD-ROM disk drive manufacturers shipped 8.3 million units into storage markets in 1993 and are projected to deliver 13.6 million units in 1994 – a 63% rate of growth. This demand is forecast to expand to 29.6 million units in 1999,” according to Robert C. Abraham and Raymond C. Freeman, Jr., authors of the upcoming Freeman Report: Optical Storage Outlook, from Freeman Associates (Santa Barbara, CA).

“Multimedia applications, a steady flow of new titles, and declining hardware, software and replication costs continue to stimulate vigorous demand for CD-ROM technology,” state the analysts.

According to the study, the WW market for computer attached CD-ROM drives will approach $2.8 billion at OEM price levels in 1999, a 14% CAGR from the $1.2 billion value of the 1993 market.

Total shipments of CD-ROM drives for 1993 were up 141% over 1992 levels, while revenue was up by 55%.

“This difference in rates is due to mushrooming growth in demand teamed with rapidly falling prices for all types of CD-ROM drives,” reported Freeman.

Drives with sub-400ms access times and double transfer rates led market growth in 1993.

These products will be the predominant class through 1995, with a shift to even faster drives expected by 1996.

Market leadership requires manufacturing muscle
Production of CD-ROM drives will continue to be dominated by Asian manufacturers because of their established positions in the CD audio market. Matsushita garnered 24% of industry revenue in 1993, trailed closely by Sony at 23%, followed by Toshiba and Mitsumi with 14% each.

“The combination of high volume and low prices that are driving this market require leadership manufacturing,” stated Abraham. “It should be no surprise that Matsushita and Sony control nearly 50% of the market.”

The report predicts that no US manufacturer will enter the CD-ROM drive manufacturing business. Involvement by US companies in CD-ROM will continue to be extensive but will take place in electronic publishing, marketing, systems integration, and disk replication.

This analysis of the CD-ROM market will be included in Freeman Associates’ Optical Storage Outlook ($2,195), to be published in May 1994 and covering rewritable, write-once, and CD-ROM drives.