To prevent DVD players from becoming victims of their own popularity, manufacturers are starting to combine basic movie playback with more advanced features. Nearly 13 million DVD players were sold in the United States in 2001--an increase of 49.5 percent compared with the previous year. Sales are expected to grow another 25 percent in 2002, according to new figures from the Consumer Electronics Association. Sales of decoder chips, which are used in devices that play DVD discs such as PCs and standalone machines, reached 29.6 million in 2001--a 60 percent increase compared with the previous year--according to Jon Peddie Research.

But that good news also has a downside. Dozens of manufacturers have jumped on the bandwagon, resulting in sliding prices and reduced profits. The cost of DVD players fell more than $200 within two years of their introduction in 1997 for nearly $500, according to Peddie Research. And the price slide hasn't stopped. Although the Consumer Electronics Association says the average price of a DVD player was $193 last year, consumers can now find players for less than $100.