The Contents of the Announcement / Mr. Takao Ihashi, KANJIKAI Chairman I had long been engaged in the development of optical discs at Sony Corporation, working on the development of CDs and a variety of other optical discs under Dr. Nakajima, present Chairman of CDs21 Solutions. Currently I am working for START Lab as president. Concurrently, I serve as Chairman of KANJIKAI (Steering Committee) of the CDs21 Solutions Group. Today I'm going to talk about the breakthrough of the 10 billion marks by CD-R . Before doing so, let me touch on CDs21 Solutions and as to why this voluntary association exists engaged in a broad range of activity. Multimedia and CDs21 Solutions As referred to in Chairman Nakajima's address, 10 years or more ago the CD-ROM standards were made public and began the age of wide use of CD-ROMs on PCs. In those days we often heard of a certain word going around. That's "Multimedia". CD-ROM was the representative medium, but it took much time and cost in making, so there was a mounting need to resolve the problem. Against such a background, CD-R was born which allows compatibility with CD-ROM. In those days, tremendous time and cost were consumed in the making of CD-ROM even with computers of the most advanced type at that time. I recall we were selling relevant systems to the U.S. and other regions while having not a little concern about how things would turn out. However, thanks to the debut of CD-R, CD-ROM became simple and easy to make out utilizing precious data prepared on computers. In this sense I feel we can safely say "R" contributed greatly to the spread of "ROM". Meanwhile, as a consortium aiming at the spread of CD-ROM in Japan, the Multimedia CD Consortium started its activity from 1991. There was another body coming out around 1996 with the target of promoting CDs compatibility and spread. It was the Orange Forum named after the Orange Book which contains CD-R related standards. Since both organizations were dealing with the same CD standards and were striving for the spread of associated hardware and software, they, in fact, shared the same common purpose. Eventually therefore they were merged together with the new name of "CDs21 Solutions" under Chairman Nakajima, and the new body has since been moving forward up to now. As of this April (in 2004), we have a membership of 68 firms (domestic 47/overseas 21). Most of the global manufacturers related to CD-Rs as well as software houses using CD-Rs have entered in our membership. As for firms abroad, we have 15 Taiwanese firms and 3 Korean firms along with 21 others covering China, India, Germany, Switzerland, Netherlands, Greece, the U.S., etc. They are thus working together for the spread and promotion of CD-Rs. The formation of our association is such that Chairman Nakajima presides over KANJIKAI, under which we have the Communication Committee, Study Committee and Technical Committee. These Committees are comprised of working groups and these groups hold study meetings in their specific fields from time to time to examine standards, etc. and come up with proposals. This year we have newly set up the Expansion Working Group (EWG). Since CD-R applications are rapidly expanding right now, this group aims at making due studies and propositions in the areas concerned. In this way CDs21 Solutions is playing the principal role worldwide centering on the spread and promotion of CD-R/RW. The substance of its activity is mainly to ensure and maintain the compatibility of CD-R/RW. It has so far conducted many technical examinations so that the outcome may be reflected in the relevant standards. It also has proposed recommended standards for new optical cards and made CD-R/RW life tests to report the result along with environmental conditions. Further, it has recommended the proper usage of media, while extending its activity to public relations and publications. Recently, moreover, CDs21 has been paying attention to the development of CD-R/RW software applications with the aim of ensuring stable broad-based compatibility. In the present situations where as many as 10 billion CD-Rs are used annually environmental considerations are becoming an increasingly significant issue. So we intend to hold study meetings to examine how we should cope with these questions in the future. We also are conducting R & D so that we may be able to come up with suggestions for a more developed form of CD-R/RW. 10 billion pieces output of CD-R Now I would like to explain how we figured out the output of CD-Rs as 10 billion pieces. Indeed, we can say "10 billion pieces" in a few words. But consider this. Since each CD is 1.2mm thick, 1.2mm multiplied by 10 billions comes to 12,000km. That is, when 10 billion CDs are piled up one upon another, it results in a stack 12,000km high which equals the diameter of the earth. Such an enormous amount of CD-Rs were actually produced last year. We just marvel at what has been accomplished. When we assume the global CD-R output to be 100 percent, the rate of share is 89 percent for Asia, 9 percent for Europe and 2 percent for the U.S. The output in Asia is roughly estimated to be 9.25 billions, followed by 0.94 billion in Europe and 0.21 billion in America, mainly in Mexico. Among the Asian nations which cover the highest output, Japan's share is roughly 8 percent. The top share is roughly 52 percent by Taiwan. Incidentally, India is recently coming to the fore as a CD-R production base. Regarding Taiwan, the current situation is that the CD-R production base is gradually shifting to China. In this regard, in our statistical analysis we make a point of differentiating China from Taiwan. This way we avoid double counting. Thus, overall, we have arrived at the estimate that the total output has slightly exceeded the 10 billion level. I believe that the figures of "10 billion pieces" can be regarded as epoch-making in that it is the highest ever number attained for any recording media in human history. By the way, when we review the output of audio cassettes from the year 1993, five billion units was the highest demand level ever reached. As for the floppy disc, it has consistently maintained a yearly output level of 2 billion pieces. As for the CD-R, its output showed a curve of a sudden rise starting from around 1996 and 1997. Since then its output has kept on rising until it has finally reached 10 billions. From the year 1989 to the first half of 1990s, in which period Chairman Nakajima went through hard times, lots of CD-Rs were used in Japan, especially for the creation of game software. The use of CD-Rs was so brisk that without CD-Rs, the game culture, now so central to Japan, could not have taken off smoothly. Anyway, in making ROMs for the game use, it is true that the work would not have advanced an inch without "R". The same situation may be applied to the U.S. of that period. CD-R contributed greatly when a large number of CD-Rs were used in the U.S. for the development of ROM for computer software. From that time on, I suppose "R" began to be used gradually and increasingly leading eventually to the attainment of 10 billions. Survey on 10 billion pieces Next, I would like to touch on the procedures through which we came to the estimation of 10 billion pieces. In one such procedure, we issued a questionnaire and polled our CDs21 members. Since major CD-R manufacturers the world over are listed in our membership, we asked each of their marketing department to conduct a survey of their own. Then based on the collected results, we came to the number of 10.4 billion pieces approximately. Concurrently, we at CDs21 Solutions independently requested multiple market survey firms which are renowned globally to conduct similar investigations. @Moreover, we also referred to reports available from public organizations like the Japan Recording Media Industries Association. We found some variations among the result of each survey. For instance, demand figures in excess of 14 billions were indicated in some survey reports. Overall, however, the collected figures generally range from 8 billion to 11 billion or 12 billion pieces. From the above outcome, we came to estimate that the global output of CD-Rs for 2003 exceeded 10 billions. The aggregate total at the present stage comes to 30 to 35 billion pieces. That is, 1.2mm multiplied by 30 billions equals 36,000km and this length is roughly equivalent to the circumference of the earth (40,000km). In other words, CD-Rs have so far been produced in such quantities, finally pushing the output to 10 billions in a single year. This is truly a commemorative accomplishment, isn't it? What has driven of CD-R usage? What has driven the usage of CD-R to this degree? First, I must point out the active and strenuous efforts made by media and drive manufacturers. The issue of compatibility has proved to be particularly important. CDs ensure global compatibility by using a common worldwide format. Those manufacturers and others concerned keenly noticed this fact and have made determined efforts to secure compatibility. I must say we cannot emphasize this point too much. The drive and media manufacturers regularly conducted step-by-step drive/media Round Robin tests. They thoroughly investigated every problem without leaving any of them unheeded. And they moved to have the result reflected in the standards. The present compatibility that is enjoyed has been realized in this manner. Undoubtedly, one of the big points in making CD-R widespread is the creation of the present status which allows smooth data exchange regardless of the Windows, Mac or Unix environment. There's one more thing. As you know, the CD-R itself is a write-once medium. One cannot delete what was already recorded and write into that area over again. Thus far, such a write-once medium was always only a supporting player. The leading player has always been a repeatedly recordable medium that allows rewriting. But it has now proved that if the price is reasonably low, a write-once medium will be consumed in quantity. The use of CD-Rs increased along with the spread of PCs. In this way the media supply has rapidly increased to the satisfaction of users. This is the legacy of the tremendous efforts by all those concerned. As Chairman Nakajima referred to earlier, the unit price per bit is an important thing as well. In terms of the 1.4MB floppy disc, one CD-R has the capacity of recording data amounting to more than 400 floppy discs. So the CD-R per bit price is very cheap. I think this is another big factor behind its popularity. On the other hand, when viewed from the end-user convenience standpoint, CD-R now permits recording and playback at varied speeds. The trend toward higher speeds started from around 1994 in the form of a double speed, 4 times speed and so on. Drives and media can now cope with most of the high speeds. Even a 48-time speed is standardized today. We see lots of drives recently which allow writing of various DVD formats. Since, in all such devices, the CD-R recording and playback functions are basically provided together, I think we are safe in assuming that the more drives are produced the more the infrastructure of CD-R will be enriched. Also, I think we should not overlook various changes currently taking place in the Optical disc industry. In particular, the rapid spread of drives is remarkable. In parallel with the rapid spread of PCs, enormous amounts of drives are being made at the annual rate of about 110 million to 120 million units. In the sense that they are self-contained in most of PCs, the CD-R may be said to be the one and only medium that guarantees compatibility. You see that CD-Rs are in extensive use everywhere. For example, regarding the exchange of information about the Iraq war, CD-Rs are basically used as a daily practice because, among its many advantages, it is considered safer than the Net for distributing sensitive information. Broadening application of CD-RBroadening application of CD-R Meanwhile, the applications of CD-R are broadening at present. The use of CD-R is ever more increasing in the consumer sector, too. In particular, it is used in large quantities to record digital camera images, as the users appreciate its substantial capacity and reasonable price. There also is a high demand for CD-R as a medium of distribution. Further, in addition to the outstanding use for music to be enjoyed personally, CD-R is used in various ways, such as the storage and distribution of PC data. In terms of archives of digital data, CD-R is used extensively for storing important data such as maps, medical data, etc. CD-R finds great needs in the field of archives. In particular, CD-R's big merit there appears to be "not rewritable". This point seems to be highly valued. Further, CD-R is coming to be used at public organizations centering round the U.S. and Europe for submitting documents, etc. as electronic files. Also in Japan, the Ministry of Land, Infrastructure and Transport now recommends keeping construction-related data by recording them on CD-Rs. The utilization of CD-R by public organizations as a recording medium likely will expand in the future. I believe such sorts of usage are also one of the important factors that broaden the use of CD-Rs. I hope you may have recognized today through the number of 10 billion pieces that CD-R has grown up to be the greatest medium in history. It is particularly important that through CD-R we have come upon the end-user's needs for a write-once type option, that is, a non rewritable medium. In fact, out of those optical discs being used at present, nearly 90 percent are the "R" media. This means that among optical discs, a new business based on write-once type recording medium has been successful for the first time. This "10 billion pieces" sounds a monumental accomplishment to us also in the sense that one big target has been cleared. We interpret that a cultural revolution has occurred where a transition has been made from the culture of rewritable recording media to the culture of write-once media, that is, the "R" type. Our understanding in this regard is that along with the number of 10 billions, the culture of non rewritable discs has been accepted widely among users. @We are confident, moreover, that the culture of using "R" will keep on expanding on a global scale. We at CDs21 Solutions are determined to continue our efforts to actively further and grow the "R" culture. With the above, I think I have finished my talk on how we estimated the 10 billion pieces of CD-Rs along with its background. Thank you! ( Note) : May 10, 2004 (at Toshi Center Hotel): From a record of the speech by Mr.Takao Ihashi, CDs21 Solutions KANJIKAI Chairman at the press conference meeting to announce the breakthrough of 10 billion marks by CD-Rs in the total worldwide output for 2003.