History (1992): European CD-ROM Sales Pushed by Germans

“The development of the former communist half of the country will result in Germany setting the pace for growth in the CD-ROM market for PC systems. German sales of CD-ROM drives, which currently represent around 24% of the total $68.2 million European market, will rapidly increase to around $47 million by 1996,” according to a report by international market research publisher, Frost and Sullivan.

“In East Germany, there will be a large increase in the market for products which help to overcome the limitations of the telecommunications infrastructure,” says the report E1656, The European CD-ROMS for PCs, priced at $2,800.

Other countries where growth will be higher than average include France and Spain where sales of drives are expected to be worth $30.2 million and $15.7 million respectively in 1996. The UK, currently the second largest market worth $15.2 million, will grow at a slower rate but will maintain its overall position by 1996 when it will be worth $35.6 million.

Prices for CD-ROM products are not expected to fall as fast as most storage devices, according to the report, nor will falling prices be balanced by demands for increased performances and features.

The report forecasts strong growth until the period 1994-1995, at which time it says: “The growth in the market for CD-ROM drives will be offset by price falls, so that the actual market size will remain constant.“

The price for which CD-ROM disks are sold is often out of proportion to the cost of the medium with some disks being sold for several thousand dollars a year.

At the other end of the scale, many other are simply given away or provided in conjunction with another service. F&S believe that the premium currently being charged for some of the expensive disks will fall, but that higher-value applications in business and industry will still represent a significant proportion of the total market.

Total sales of disks in Europe are expected to rise from $254.8 million in 1992 to over $1.19 billion in 1996. This represents an increase in sales, over 4.87 million units in some industry sectors, CD-ROMs face stiff competition from other high density storage technologies, including other optical techniques. But, as these are more expensive, the report predicts that the CD-ROM seems secure for some time ln its role as an information distribution medium.

Only a few sectors are making use of CD-ROM at the moment, partly due to the limitations of the distribution network and also partly because of the marketing, which has generally only tarqeted the industry itsel and related industries such as electronic publishing and multimedia rather than the end-users themselves.

Today, the best-developed enduser sector is libraries. Another important area consists of typefaces and clip art for desktop publishing. Databases of abstracts for research applications are becoming widely available in Europe from European sources. According to F&S, these will grow rapidly to become the second-largest application area by 1996. In value terms, the largest application is for business information, and this will remain so by 1996.

CD-ROMs for PCs, European market, 1992 and 1996

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue ≠59, published on December 1992.