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CD players losing spark on U.S. DVD mania
Dec 2, 2002
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Who needs a CD player? The gadget, which helped revolutionized the way Americans listen to their music in the past two decades, is fast losing its luster. It is falling prey to the DVD player, which now masquerades as both a movie and a music disc player.

And if this holiday shopping season is any indication, CD players look set to finish 2002 on the fringes of America's living rooms as retailers like Wal-Mart Stores Inc. have intensified the selling of rock-bottom-priced DVD players to entice shoppers this year.

While Wal-Mart is flaunting its U.S. $48 DVD player, Best Buy Co. Inc., the No. 1 U.S. specialty consumer electronics, says it has an even cheaper DVD player at $39. The first gadget to fall victim to the unceasing DVD rage was the video cassette player.

But analysts and retailers say consumers are also increasingly losing interest on stand-alone home CD players since the equipment makers are now opting to build all-in-one DVD machines to cut costs. Some video gaming machines such as Sony Corp.'s PlayStation 2, can play DVDs, as well as CDs.

"Every DVD player is a CD player, which is why the CD player is becoming less important," said David Schick, an analyst at SunTrust Robinson Humphrey. "The CD player market has already become a smaller market," he added.

Since their introduction in 1983, the CD players have stood at the forefront of home entertainment as more and more people embraced the versatility and quality of compact discs instead of the traditional vinyl records.

But with the music industry in the doldrums and Internet piracy unstoppable, consumers have little reason to continue spending on stand-alone CD players, analysts said.

Even though CD player prices have also been falling just as fast as Hollywood has been churning its blockbuster movies on DVDs, very little is seen saving the CD player from biting the dust.

According to market research firm NPDTechworld, unit sales of home deck CD players are down 48.1 percent year-to-date. That data, however, excludes figures from Wal-Mart, warehouse clubs and direct merchants as those stores do not contribute to the research.

"What people are buying are new versions of home theater systems," Tom Edwards, senior analyst at NPDTechworld said. The systems, which this holiday season are selling as low as $139, come replete with speakers, as well as a DVD/CD player -- which in some brands, even has a slot for playing your favorite VHS tapes, too.

The DVD players, which debuted in 1997 for about $500 are now estimated to have made their way to about 30 percent of U.S. households, the kind of growth which analysts say make them the fastest adopted technology in recent history.

Larry Costello, a spokesman for Sears, Roebuck and Co-- the 4th-largest U.S. retailer -- said the company was indeed "seeing less demand for CD players as demand shifts more toward digital products which play both DVDs as well as CDs".

Tweeter Home Entertainment Group Inc., a mid- to high-end audio/video equipment retailer, said recently that CD players continue to fall as a percentage of sales, while demand for its flat panel plasma/LCD televisions is up.

The big, high-definition TVs are a boon for consumers wanting to experience all the benefits of DVDs, which among other benefits, allow users to navigate programs more easily and experience vivid pictures and crisp sound.

In one other sign of the hard times facing traditional CD players, is a $118 Wal-Mart offer on a 25-disc changer which about 5 years ago, would have cost more than $500.

But still, Catherine Cochrane, an analyst at The CD-Info Company said the CD player industry may get a slight reprieve from the auto and personal audio consumer segments, which continue to be buoyant even as the traditional home CD player market shrinks.

"There's still strength in the CD category although it's declining year over year," said Bill Cimino, a spokesman for Circuit City Stores Inc.

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