Unbranded CD-R prices on the slide

The last few months have witnessed a constant slide in prices of unbranded

CD-Rs. These CD-Rs which were sold to dealers at about Rs 17-18 two months back

are now being sold at as low as Rs 10-11. This trend is expected to continue for

few more months and market sources estimate that prices may drop to a low of Rs

6 in the near future.

Increasing demand for CD-Rs is considered to be one of the major reasons

driving this price decline. According to market estimates the country consumes

nearly 60 million CD-Rs a year. Says Devang Mehta of Crystal Impex, "With

the manufacturing costs constantly coming down, this slide would continue for

some more time before its reaches a static price-point. Also by then the market

would become far more mature."

Also

the imposition of anti-dumping law in Europe over Taiwanese CD-Rs is considered

to be another reason. Taiwanese exporters have started dumping their products in

the Indian market, thus resulting in price-cuts.

Not all dealers are happy with this decline in prices. There are complaints

that manufacturers have failed to provide price-protection to dealers while

cutting down on CD-R costs. Says Hasmukh Zaveri of 21st Century Electronics,

"We no more feel encouraged to order in large quantities as manufacturers

have mostly failed to provide us protection against price fluctuations. We

cannot afford to lose money in a business where the operating margins anyways

are ridiculously low at around 10-20 paise per CD-R."

On a similar note, Devang adds, "One has to be extremely cautious in

this line of business as prices are still in a volatile stage. In such a

scenario, over-stocking should be strictly avoided."

The competition in this segment is also bound to get fiercer with more local

players like Vark and T-series setting up their manufacturing facilities in the

country. So far the Indian market had been dominated by companies like Moser

Baer and Computerskill.

GOLDIE



MUMBAI