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Apple Hedges Bets With Dual-Format DVD Drive Addition

TMO Reports - Apple Hedges Bets With Dual-Format DVD Drive Addition

by , 9:00 AM EST, March 6th, 2003

Apple has quietly switched to an internal SuperDrive on the 17-inch flat-panel iMac that adds the future potential of burning DVDs in the +R/RW format as well as -R/RW. The change is being seen by industry watchers as Apple's way of straddling the fence, pleasing all customers and preparing for a day when dual-format drives will be standard fare in both Macintosh and Windows PCs.

With the addition of the 17-inch flat-panel iMac, introduced this past January, Apple has switched to a dual-format DVD drive, or what is known in the computer industry as a 'SuperMulti' component. The 15-inch flat-panel iMac continues to use the Pioneer drive.

Previously, Apple used the Pioneer-made DVR-104/A04 or 103/A04 drive, which supports only the -R/RW format. Now, Apple is using the Sony DW-U10A drive (see photo below), which is the first DVD drive on the market that reads and writes at 4X speed in both -R/RW and +R/RW formats, as well as offering support for DVD-RAM, DVD-ROM, CD-R and CD-RW.


Sony's DW-U10A Drive
But although Apple has switched drives, only the future potential of burning in the +R format has been added. According to sources familiar with the drive, Apple has deliberately turned off the ability to burn in the +R format via a firmware fix to chips directly on the drive's motherboard. According to a number of companies who work directly with Apple, the company has made no indication it is ready to add the capability to burn in dual formats.

One source, who asked not to be named for this story, said Apple is preparing new versions of iDVD and Disk Burner to support both DVD formats, but until that happens, Apple will not release a firmware update to activate +R/RW on the 17-inch iMac models. At present, the only Apple software product that supports burning of +R/RW DVDs is DVD Studio Pro. The highly popular Roxio product, Toast, supports all popular formats, but only if the drive allows for burning in a particular format.

Until Apple adds +R/RW support, users are resigned to -R/RW burning only, or to hacker Web sites offering instructions on how to modify the firmware of the drive. A dangerous alternative for those who have little experience in computers, some resourceful Mac users have reported success in adding +R/RW formatting with patches.

An additional source has confirmed Apple plans to switch to the dual-format DVD drive in all future Mac models. An Apple spokesperson refused comment on these reports.

If you can't beat 'em, join 'em

Apple's decision to support dual DVD formats is an interesting hedge on the future to make sure consumers can simply burn DVDs and not have to worry if it will play in another computer or in another consumer DVD player. "It's a prudent and intelligent decision on their part to support dual formats," Steve Baker, an analyst with NPD Intellect, told The Mac Observer. "They were taking a bigger gamble on support for one format than on support of both. Yes, it might cost them a little more in royalties to both the -R and +R consortiums, but it's better than losing consumer business because a guy can't play DVDs burned on a Mac with his home DVD player."

"It's a reasonable approach," said Ken Weilerstein, analyst Research Director at the Gartner Group. "It's not costing them that much more to support both (formats) and I'm sure they have gotten a good deal from Sony (on drive pricing) that is competitive with -R/RW-only drives. It's a smart choice on Apple's part."

Similar to the war in the 1980s between VHS and Beta, computer manufacturers have taken sides in the battle for supremacy in the world of DVD formats. On one side are the backers of -R/RW, known as the DVD Forum, of which Apple is a member along with 212 companies including AOL-Time Warner, Sony, Toshiba, Nikon, NEC, Motorola, Iomega, and IBM. On the other side is the DVD+RW Alliance with it's 50-plus members, which include Microsoft, Dell, HP, Philips Electronics, Sony and Yamaha. Apple is not a member of the DVD+RW Alliance, despite its decision to use +R/RW-ready drives.

-R/+R: Can you tell them apart?

Both formats are technically very similar. Both are equally compatible with DVD players. Both are similar in price for drives and media. Both support single side 4.7 GB DVDs and double side 9.4 GB DVDs.

"Neither group can claim major technical advantages over the other that would make consumers buy one format compared to another," said Wolfgang Schlichting, an industry analyst with technology intelligence company IDC. "This has nothing to do with one format being faster to burn or having more storage capacity than another."

In terms of compatibility with DVD players, both formats are neck and neck in acceptance. According to industry watcher DVDRhelp.com. -R is compatible with about 88% of all DVD players and DVD-ROM drives on the market, while -RW is compatible with about 69%. +R is compatible with about 84% of all DVD players and DVD-ROMs, with +RW being compatible with about 70%. The level of compliance with consumer DVD players is in stark contrast to the situation a little over a year ago when -R dominated the DVD landscape and very few consumer DVD players supported +R.

In terms of the price for drives and media, the gap between drives with one format or both is narrowing very quickly. At present, drives with only one format are retailing for US$250 to US$300 dollars. Dual drives, such as the Sony model, are retailing for around US$375. Analysts believe dual format drives will come down to below US$300 by the end of the year, if not sooner. Drives sold by original equipment manufacturers (OEMs) such as Pioneer and Sony to PC makers like Apple, HP and Dell are sold in great numbers and therefore at cheaper prices anywhere from US$125 to US$190, analysts told The Mac Observer. OEM pricing is expected to come down substantially as well.

As for media, -R DVDs are the cheapest at around US$1 each, while +R media is a little more expensive at around US$1.50 to US$2 each. "That gap in media pricing is narrowing even more rapidly than drives prices," said Baker. "Honestly, the difference in pricing is becoming less and less of an issue almost by the month."

Which format? It's all in the market share

So if the differences are not that great, why is there an industry split? "It has to do with 'strength in numbers,'" said Weilerstein. "It has to do with what companies have signed on to a format and how big they are. The bigger they are and the bigger the segment of the market they have in DVD products is all that really matters."

"Although the -R camp has more members, the +R camp with its big PC makers and Microsoft support control more of the market," said Baker. "It comes solely down to how big the players are."

Weilerstein believes Apple originally supported the -R format when it first came out with DVD-equipped Macs in January of 2001 because it had better playback compatibility in the set-top DVD players consumers were buying, along with the fact that the internal -R-ready drives mechanism was more widely available and less costly at the time.

However, with +R picking up acceptance from major Apple competitors as well as the makers of home DVD players, Apple appears to have decided it's better to play it safe. "Do you think Apple is going to stay in one camp when it looks at the landscape and sees its major competitors? said Weilerstein. "If it's smart, it's going to play wherever it can gain the most customers, just like Sony."

Somewhat similar to Apple, Sony is also playing both sides. While Sony is selling the DVD+RW drives and is a member of the DVD+RW Alliance, it continues to support -R through its membership in the DVD Forum. It also sells and manufactures DVD-RW discs. Sony representatives have in the past said that the success of one format does not necessarily mean the failure of another.

Another potential reason Apple could be readying to support +R is Microsoft's recent backing of the format and its decision to add +RW support in its next version of Windows. Microsoft's more active role in the +RW format could prove important in determining the dominant format in a long-running battle for market share.

What will bring other PC makers around to adopting dual-format DVD drives in their PCs like Apple has done? Analysts believe it will be customer demand for dual drives and ever-falling component pricing. "There's a fear in the PC industry right now that dual-drives will drive down prices for all types of DVD drives and therefore drive down profit margins, which are already very tight," said Baker. "It's inevitable that dual drive pricing will fall to a point where they might as well switch. But until that happens, they're going to squeeze out as much of a profit as they can."

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