Tuesday, February 19, 2008

HD DVD is Swimming with the Fishes (R.I.P. 2002 – 2008)

The battle has been won. To the victors, in this case Sony, go the spoils. Toshiba this week announced it was pulling the plug on it’s HD DVD format which had been embattled against Sony’s Blu-Ray HD format.

The tipping point seems to have been last month’s abandonment of the HD format by Warner Bros. Entertainment, the top DVD publisher, followed by Wal-mart’s decision to no longer carry DVDs in the HD format in their stores.

Toshiba's decision to no longer develop, manufacture, or market HD DVD players and recorders at one point had bolstered the company’s stock, although what lies ahead for the company and the consumers who invested in the technology is unclear.

(See AP video story)

The big question however is what will be the impact on Toshiba’s other product lines? The company has a fairly deep commitment to the HD DVD product line. This includes HD DVD integration into some of its laptop PCs, and external drive accessories. The company now has the challenge of liquidating their surplus inventory, and dealing with irate consumers who bought the HD DVD player/recorders. This demonstrates again the need for hardware manufacturers to collaborate on compatible formats instead of those that are mutually exclusive and proprietary. For companies like Toshiba, this circumstance clearly impacts profitability. For the consumer, it means early adoption is extremely risky and delays reasonable adoption rates.

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