Thursday, September 27, 2007

High-Definition War to Remain Deadlocked for 18 Months Analysts

The war between Blu-ray and HD DVD high-definition video formats will last for another one and a half years, analysts from Forrester Research claim. The reasons for that are relatively high prices on high-definition video players and strong market positions of both competing standards. As a result, the winner is currently unclear.

“Blu-ray’s failure to land a knock-out blow means that the format war will continue for at least 18 more months,” said J. P. Gownder, an analyst for Forrester Research, a research company that predicted in 2005 that Blu-ray would eventually win a hard-fought victory over HD DVD in the next-generation DVD format war.

According to a report by Forrester Research, which was released on Monday, sales of Blu-ray disc (BD) and HD DVD players will not pick up for another year and a half as consumers want lower prices and confidence in the future of their players and chosen disc format. Given that currently both Blu-ray and HD DVD have relatively strong market positions – thanks to Sony’s PlayStation 3 game consoles with BD drive and low-cost HD DVD players from Toshiba – the outcome of the battle is not completely.

Even though Forrester Research and analyst J.P. Gownder believes that Blu-ray would eventually win out over HD DVD, it was indicated that the strategy needs “altering”.

“Blu-ray’s content advantages are somewhat diminished since the recent decision by Paramount to commit exclusively to HD DVD. And HD DVD hardware prices have dropped directly into consumers’ preferred price range, according to Forrester’s Technographics survey data. Weakened by these developments, Blu-ray needs to offer a viable hardware model at the $250 price point by Christmas 2007,” said Mr. Gownder.

The analyst claims that Blu-ray’s “strategic advantages” could be undone by HD DVD’s lower price and the amount of available content. Therefore, to win, the “Blu-ray partisans” must drop their hardware prices.

Currently an HD DVD player from Toshiba can be obtained for $250 - $300 in the U.S., whereas Blu-ray player from Samsung costs starting at about $480.

“The Blu-ray camp must also stave off further studio defections, and employ more aggressive promotional tactics to counter HD DVD’s recent momentum. Failure to alter strategy would open up Blu-ray to a possible upset defeat at the hands of HD-DVD,” the analyst believes.

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