Storage & media capability spurs line

	Dongguan Qisheng’s model QHD810 network media player supports UPnP AV/NMPR 2.1 and DLNA protocols. Connectivity is via 10/100Mbps Ethernet LAN, 802.11g/n and USB adapter.

Network media players gain more traction, while development of storage-centric NAS devices continues.

Networked media capability is giving China’s otherwise sluggish NAS manufacturing industry a boost. Backed by surging demand for online content, output in this category is expected to hit 3 million units by year-end for a 50 percent YoY increase. The supplier base has expanded by 30 percent to the current 40 companies.

While the type is still regarded as high-end and as such prey to changes in consumer purchasing power, these products have the advantage of high-definition content playback. Their low price also positions them as a suitable alternative to other devices, including Blu-ray players. The quote difference is at least 15 percent, sharpening the category’s competitive edge.

For the main segment NAS, suppliers in China continue to offer models with no HDDs. They leverage this to gain price advantage, having no capability to make the component in-house. By allowing buyers the flexibility to source hard drives at lower costs and with aftersales support in their home countries, local manufacturers are subject to less outlay fluctuation. This enables them to control quotes better in order to attract more orders. Even so, enterprises can accommodate customers’ requirements and provide terminal devices by outsourcing HDDs.

Despite the technology challenges, interviewed makers are confident of industry growth, expecting to benefit from a demand upturn as the business climate improves. They are looking at a 5 percent boost at most for NAS production by year-end, with estimates approaching 1 million units as economic recovery spurs upgrades. This is anticipated to advance further to 8 to 10 percent in 2011 as adoption broadens in developing regions such as South America, Asia and the Middle East.

One challenge, especially for manufacturers of network media players, is the anticipated decline in orders from Europe due to the financial crisis there. Further, this and the NAS line remain niche categories in China. Local NAS devices have a market limited to home and SOHO applications. The more lucrative enterprise segment continues to be dominated by foreign companies, including IBM and Netgear. This is why domestic vendors are discouraged from joining the sector, keeping the supplier pool at fewer than 20 in the last two years.

Moreover, competition is intense, with nearly 80 percent of makers worldwide pursuing mainly nonenterprise products. The last in fact represents about 80 percent of global output, a trend that is expected to persist through 2013.

	Eaget’s model N860 NAS device has 1GB capacity. It enables FTP remote access, and folder authority and password setting.

Suppliers in the NAS sector have expanded from enclosures to application software development but have no plans to go any further. In the next two years at least, many will center R&D efforts on these aspects.

Eaget Innovation and Technology Co. Ltd concentrates on industrial designs and works with third-party specialists to achieve differentiation. The maker also highlights performance-enhancing features. An example is the addition of a 4cm-diameter low-noise fan for better heat dissipation and operation stability in high-temperature environments.

Shenzhen Elan Electronic Co. Ltd is devoting in-house resources to improve user interface. This covers the integration of numerical LCD screens to display IP address and system status.

By application, China’s selection consists mainly of low-end and midrange units.

Models in the former category come with a single bay for a 500GB to 2TB HDD with a 7,200rpm rotational speed. These have RJ-45 and USB 2.0 host connectivity. A StorLink SL3612 chip is onboard.

Midlevel types differ with a Marvell 88F5281 IC and 128MB system memory. These have one to four bays to match a 1 to 4TB capacity requirement. Connectivity is enabled via 10/100/1,000Mbps Ethernet LAN, and USB 2.0 and SATA hosts. Wi-Fi 802.11b/g/n is an optional feature.

Higher variants integrate a Marvell 88F5BF01 chipset and can support 2, 4 and 8TB in a two- to four-bay configuration. These boast Gigabit Ethernet LAN connection and a built-in FTP server. USB 2.0 and SATA hosts and an RJ-45 port are included.

Hardware and software account for 60 and 40 percent of the cost of NAS devices. Spending on the former differs greatly because of a broad base in terms of types and suppliers. That on software is within a 5 percent variance only as most local enterprises adopt the platform of IC providers, mainly StorLink and Marvell.

Chipset and system memory are the key NAS enclosure hardware requirements. These represent 35 to 50 percent of final outlay. Casings have a 15 to 20 percent share, depending on the size. Aluminum alloy is mainly used. So far, outlay on these manufacturing inputs has been stable, keeping product prices steady as well.

The first two types are also referred to as digital media centers. These have mainly a file management function and can copy data without a PC. Video and music playback and photo display on TVs from external input sources are enabled. The last covers HDDs, USB flash drives, SD/MMC/SDHC cards, digital cameras and printers.

The compatible formats are AVI, MPEG, DAT, RM, RMVB, DivX, Xvid and VOB. An HDMI output enables a 1080i or 720p display resolution, which is now a standard feature even in low-end units. For midlevel variants, it is 1080p full high-definition. These are priced $22 to $27. Entry-level devices are $16 to $19.

In the strictly network category, midrange models support UPnP AV, DLNA and LAN protocols, while the higher versions connect via wired and wireless 10/100Mbps Ethernet LAN as well. Both have a video decoder for MPEG-1/2/4, AVI, Xvid, WMV9, H.264, AVC and VC-1, and an HDMI output that can handle up to 1080p at 60fps.

To enhance value, some suppliers are integrating other functions. At E-Song Digital (Hong Kong) Ltd, it is online video and TV/video recording. Dongguan Qisheng Electronics Industrial Co. Ltd released a new model with built-in DVB-T early this year.

Besides units provided without HDDs, the local selection includes nonstorage slim variants. These types play back content from external storage devices through card slots or USB 2.0 ports.

Low-end and midrange models dominate output this year, accounting for 30 and 50 percent, respectively. Yield for the latter configuration rose 10 percent YoY.

The decline in the cost of chipsets for such and high-end units allowed suppliers to expand product functions without raising quotes.

The upscale category, however, is down to a 20 percent volume share, sliding 10 percent this year as main market EU scales down spending due to the ongoing regional crisis.

For network media players, the chipset is the key component. Versions that support high-definition playback are $10 to $25, lower by nearly 25 percent than last year.

Basic units with no such capability remain unchanged at $4 to $6.50.

Domestic makers source ICs from Sigma Designs, MStar, Realtek, Telechips and M-Logic. The last is usually applied in entry-level players.

Plastic and aluminum alloy are used for the player casings. The latter is mainly adopted in upscale models because of its better heat dissipation feature.

Network media player and digital media center quotes are expected to remain at current levels until year-end. In 1H11, these might decrease by about 5 percent amid falling chip costs.

For HDDs, China manufacturers turn to Hitachi, Samsung, Seagate and Fujitsu. The first two have factories in Guangdong province, respectively in Shenzhen and Dongguan, and the third in Wuxi, Jiangsu province. The options are 2.5 and 3.5in, with a respective capacity of 80 to 160GB and 320 to 640GB.

Taiwan suppliers offer NAS devices for enterprise, SOHO and home applications. The first two categories form the bulk of output, while variants with media players, also called network multimedia players, fall under the third. Some of the latter are used for digital broadcasting as well.

Makers emphasize function enhancements, software compatibility and trendy designs. Many, including Mapower, are introducing NAS devices compliant with USB 3.0 to boost data rates. For enhanced sound reproduction, QNAP Systems Inc. uses a Wolfson audio chip in its NMP-1000P model. A-Tec Subsystem Inc.’s GS-3215 model integrates a software that supports BitTorrent, HTTP, FTP and MetaLink download and an iTunes server. It has a mobile rack.

The island’s selection adopts mainly wired Gigabit Ethernet LAN connectivity instead of WLAN due to the latter’s stability issues.

Devices used as media servers in home setups integrate UPnP and DLNA, and support realtime PC transcoding and playback. These are compatible with RM, RMVB, WMV and H.264. Most can handle high-definition video and audio, including Blu-ray, and access online services such as Picasa, Apple Movie Trailers, Flickr and Internet radio. In addition, storage and file sharing and PC-less BitTorrent P2P download are enabled. A user-friendly interface is standard as well.

Home and SOHO units typically come with one or two drive bays and have eSATA and USB 2.0 ports. Enterprise-use variants have two or four of the first. Regardless of target application, products use mainly 3.5in HDDs, with 2.5in limited to a few portable models. A number of them feature a multicard slot to connect to other external storage media. Marvell chipsets are mainly adopted.

Taiwan makers export their NAS devices to Europe, North America and East Asia.