PROFITS THIN FOR CHINA's DVD MANUFACTURERS

Declining profits pose a threat to the survival of the mainland's DVD player manufacturers, estimated at more than 500, according to market researcher iSuppli. In the first five months, Guangdong province-based manufacturers exported 34.5 million machines, accounting for 84.2 per cent of the nation's total. However, the average export price was US$40.80 per machine, on which makers earned a profit of just $1. About 30 DVD player manufacturers went bankrupt in the first half. Analyst Byron Wu noted many manufacturers lacked core technology and competed solely on price. With so many firms in the sector, it was difficult for any single company to accrue enough profits that could be ploughed back into research and development. A thinning of the herd was in order. Mr Wu said: 'The best scenario for the DVD player sector is an acceleration of the consolidation process, with larger firms taking over the smaller shops that employ skilled workers.'

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