Once a leading earner that helped lift electronics manufacturers out of a period of financial stagnation, DVD recorders have degenerated into little more than a burden as the companies slog through a drawn-out price war.

The makers are in a cheerless predicament: They are unable to continue lowering prices because their thinning profit margins can't absorb it, and they can't realistically hope to benefit from raising prices in a market saturated with lower-priced goods.

And there is no respite in sight because the popularity of DVD recorders is expected to grow as they become more powerful and easier to use.

Sony Corp. announced in January that it was lowering its operating profit forecast for the year ending March by 50 billion yen to 110 billion yen. The bleak prediction is due to falling prices of DVD recorders and flat-panel TVs.

``The (DVD recorder) price fall during the year-end shopping season was of historic proportions,'' says Sony Executive Deputy President Katsumi Ihara.

A latecomer to the market, the company has led a price-cutting competition to catch up with rivals.

Its Sugoroku line of products, featuring a noise-reduction function, sold well at the year-end, but steep price falls nullified any sales gains. Prices of DVD recorders in December were 40 percent less than what they were a year earlier, according to Sony.

The company, which does not manufacture key components on its own, has little room to cut production costs and has therefore been one of the hardest-hit by the price war.

The most popular models at one mass electronics retailer in Tokyo's Shinjuku district, for example, cost about 60,000 yen, nearly half the price of comparable products 12 months earlier.

``I get the impression most companies can no longer make a profit with DVD recorders,'' an official at a major manufacturer said.

Market researcher GfK Marketing Services Japan Ltd. says sales of DVD recorders in December doubled from a year earlier, far exceeding even the growth seen ahead of the 2004 Summer Olympics in Athens.

It is estimated that one in 10 Japanese households owns a DVD recorder, an indication of mass proliferation.

The market is getting increasingly crowded with big manufacturers.

Sony's lead at the year-end was followed by Matsushita Electric Industrial Co. and Toshiba Corp., which enjoy strong sales with their Diga and Daburoku models, respectively.

Hitachi Ltd. and Mitsubishi Electric Corp. entered the fray last year.

In order not to lose out on sales, the companies not only need to depress their prices, they also need to develop stand-out features.

Mitsubishi Electric's latest models can start recording TV programs 1.5 seconds after they are switched on, while Victor Co. of Japan is pushing models that can record on VHS video cassettes, HDDs and DVDs.

But the manufacturers have yet to come up with a feature that has widespread consumer appeal. As a result, the firms fall back on price cuts to stir consumer interest in their products.

The reason so many players have ventured into the DVD-recorder arena is that the products are rather easy to produce.

Any company can compete as long as it can procure core parts such as HDDs and DVD drives at reasonable costs, industry officials say.

Pioneer Corp., which was one of the first companies to enter the market, suffered a loss on its DVD-recorder business for the six months through September.

``There is little hope for innovative new technologies to emerge,'' a company official said. ``It's going to be a fruitless battle as long as the current price war continues.''(IHT/Asahi: February 2,2005)