Toshiba will sell Blu-ray player this year

After conceding HD DVD's defeat, the electronics company will begin supporting rival high-definition disc format

Exactly a year and five months after Toshiba brought an end to the high-definition disc format war, the Japanese consumer electronics company confirmed its plans to produce its own Blu-ray Disc player. Previously, rumors trickled in about Toshiba considering such a move; Japanese newspaper Yomiuri Shimbun this weekend reported that Toshiba will adopt the format it once battled against.

The format war was vigorously fought, as Toshiba and Microsoft backed HD DVD, and Sony, Panasonic, and a consortium of consumer electronics companies promoted Blu-ray Disc. The winner of this battle would control over the lucrative, high-definition successor to the quarter-of-a-billion dollar standard-definition DVD business.

Toshiba withdrew HD DVD from the market in February 2008 after a series of crippling blows gave rival Blu-ray a clear edge. At the time, Toshiba indicated that, in the absence of HD DVD, it would instead pursue "a wide range of technologies that will drive mass market access to high definition content. These include high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies."

Toshiba has certainly made strides with its video processing and cell processor. But none of the aforementioned technologies have yet to replace DVD players for home entertainment.

In light of all of this, the news that Toshiba will produce its own Blu-ray player is actually unsurprising. Still, it is appropriate to wonder aloud why Toshiba would swallow its pride and enter into the competitive Blu-ray Disc player market?

The answer comes down to one word: Business. Toshiba couldn't beat Blu-ray, and the company has realized there was money to be made by joining them. Just last week, the Digital Entertainment Group released its mid-year report, and Blu-ray Disc was clearly doing well in spite of the weak economy: Both disc sales and hardware sales are up as compared with last year.

When Toshiba abandoned HD DVD, I noted that, although the company did not announce any plans to produce its own Blu-ray drives, I found it impossible to imagine that Toshiba would completely abandon the market for movie disc players. After all, this was a market that Toshiba helped pioneer with the original DVD, and a market that Toshiba historically did well in (second only to Sony).

Pride aside, Toshiba had other, competitive reasons to turn to Blu-ray. The DVD player is an integral part of home theater systems. HDTV makers love to provide multiple entertainment components to consumers-and without a Blu-ray Disc player, Toshiba has had an obvious gap in its lineup. And the company has forfeited sales and market share to those companies producing Blu-ray Disc players.

It's about more than just Blu-ray Disc players: Already, Blu-ray can be found integrated into HDTVs for convenient, all-in-one entertainment systems. As this feature becomes more common, Toshiba's HDTV lineup will be at a disadvantage without a comparable offering.

The timing of Toshiba's plans actually makes perfect sense. Blu-ray has entered its mass market phase, says Blu-ray Disc Association chairman Andy Parsons.

The format is at a point of growth; Blu-ray players aren't an Aisle 4 commodity in drug stores just yet. Player manufacturing costs have fallen off dramatically as compared with a year ago. And the street prices for players are also lower-you can now easily find a player for under $US200.

All of these factors were, apparently, too great for Toshiba to ignore. That said, whether the company jumped into the fray because of Blu-ray's worldwide popularity, or just its dominance in Japan remains unclear from what little news released today. But it's worth noting that as of winter 2008, the Blu-ray Disc Association noted that Blu-ray had achieved over 50 percent market share in Japan-clearly, that means Toshiba has been leaving potential revenue on the table for its competitors to grab.

Early word is that the first device would be a Blu-ray Disc player that could ship by year's end. However, given that Japanese consumers favor Blu-ray recorders (which command more than 70 percent of the market share) as opposed to players, I can't help but imagine that Toshiba will be developing a recorder, too.

The idea of a recorder leads to some interesting possibilities. We here in the U.S. have, sadly, yet to be graced with Blu-ray Disc recorders. Most manufacturers are concerned about a perceived lack of interest in such a device in the DVR-friendly United States. Nonetheless, a consumer can dream: Perhaps Toshiba will be the company with the vision to bring recorders to our shores.

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Melissa J. Perenson

PC World (US online)
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