News

posted on 18 February 2008 06:53

NHK, A Japanese public broadcaster, reported on the evening of Saturday, 16th February that Toshiba had ceased making HD-DVD recorders and players.

Reuters reports a Toshiba source as saying: "We have entered the final stage of planning to make our exit from the next generation DVD business,"

This is consistent with a view that Toshiba is preparing to cede the high-definition optical disk market to Sony's Blu-ray format following a strong of defections from its competing HD-DVD camp led by Warner Brothers, the film studio. Recently Best Buy and Netflix increased their Blu-Ray focus.

Gartner principal research analyst Paul O’Donovan said: “Gartner anticipates Toshiba will finish with HD-DVD within the next couple of weeks. Its share price has risen on the basis that the rumours are strong that it will pull out sooner rather than later. If it delays then the stock will drop very quickly.”

“The recent price declines on Toshiba HD-DVD players were more to do with reducing stock levels of the players than trying to win market share or spoil sales of Blu-ray players. On that basis, Toshiba may well announce its withdrawal of HD-DVD very soon.”

There is speculation that Toshiba will make an announcement ending the format later this week. It will represent a loss of hundreds of millions of dollars by Toshiba and a triumph for Sony and its American boss, Sir Howard Stringer.

The hope amongst many is that the resulting focus on a single high-definition video optical disk format will accelerate lagging sales of players and recorders. Others fear that it is too late and that a coming transition to Internet download of movies will prevent this happening.

O'Donovan said: “Gartner doesn’t see any competitor on the horizon yet, and also doesn’t see downloads having a massive effect on the adoption of Blu-ray. The infrastructure is ready for massive HD video-file downloads yet, and, just like books, people still like to have a hard copy to access and use whenever they want. It’ll be quite a few years yet before downloads have any real affect on optical disc sales for HD content.”

Share prices of both Sony and Toshiba stock are rising on the prospect of Toshiba's withdrawal. There is also the tantalising idea that Toshiba could actualy become a Blu-Ray licensee and manufacture Blu-Ray recorders and players. How sweet that would be for Sony.