The traditionally strong back-to-school shopping season proved to be a letdown for PC makers, despite aggressive efforts by retailers. Students also tend to be big buyers of add-on CD-RW drives, and sales there didn't materialize either.

Craig added that CD-RW drives with 48x speeds came out sooner than expected, causing manufacturers to "blow out" inventory below cost.

Schlichting expects the glut to carry over to the fourth quarter and anticipates that there will be further price drops in the coming months.

At the same time, manufacturing processes for CD-RW drives are maturing, which should further lower prices. More and more makers are reducing the number of parts used in the drives making them faster and less expensive.

One bright spot for CD-RW makers could be the business market, where shipments are beginning to pick up.

"The corporate market has been slow to pick up CD-RW drives, but they are just starting to come around," said Schlichting. "If that accelerates, there could be some upside potential." About 15 percent to 20 percent of corporate PCs come with CD-RW drives, but that could grow to 50 percent in the coming months, according to IDC data.