It is visual technology they say will yield images five times as sharp as those from DVDs. And this time they own the patents.

Shanghai SVA Information Industry Co. Ltd., a major maker of DVD players on China's mainland, recently said it is developing enhanced-versatile-disc technology to be used in a new generation of discs and machines.

Played through a high-definition television, EVDs will produce pictures with five times the definition of today's DVDs, the company said. But the players will also be usable with ordinary televisions and DVDs.

"Since people are always asking for better picture quality, we believe the new technology will be accepted throughout the world," said Zhou Haishan, an engineer for Shanghai SVA. "EVD players will appear on the domestic market as early as year's end."

Shanghai SVA estimates their retail cost at about 3,000 yuan.

What makes the product a potential lifesaver for Chinese audiovisual manufacturers is that for the first time, they - not Japanese or American concerns - will own the underlying technology.

"We have registered some patents covering the EVD player in China. When the product finally come out, we will register them in other countries, so foreign makers will have to pay us royalties if they want to produce the machines," Zhou said.

Shanghai SVA teamed up in 1999 with nine other domestic makers, including Shinco and Malata, to establish an EVD research-and-development company in Beijing.

Domestic makers said it was the high royalties asked by DVD-technology owners that pushed them to develop their own system.

After initial warnings and about two years of negotiation, the Chinese companies agreed to pay royalties of 4 percent of a DVD player's factory price to the 6C group: Hitachi, Matsushita, Mitsubishi, Time Warner, Toshiba and Victor Co. of Japan.

The mainland manufacturers say their profit margin is only about 5 percent.

More than 100 companies exported around 10 million DVD players last year, almost 40 percent of world output.

(Shanghai Daily August 8, 2002)