The next-generation DVD war finally ended after more than five years following the decision made by Atsutoshi Nishida, president of Toshiba Corp. Since releasing its first HD DVD player March 31, 2006, Toshiba shipped HD DVD devices of roughly 1.3 million units in total until February 2008, Toshiba said.
HD DVD players: 710,000 units (600,000 units in the US, 100,000 units in Europe and 10,000 units in Japan)
HD DVD recorders: 20,000 units (only in Japan)
PCs with built-in HD DVD drives: 300,000 units (140,000 units in the US, 130,000 units in Europe and 20,000 units in Japan)
Tech-On! summarized 2006 and 2007 trends in the next-generation DVD war before, focusing on unit sales and some other factors. Although it has only been one and a half months since we issued our last summary, we would like to quickly cover the history until Mr. Nishida made his decision.
At the press conference, President Nishida did not hesitate to express his feeling of bitterness about Warner Bros Entertainment Inc, which broke off its contract to supply packaged software in the HD DVD format and switched itself to a Blu-ray Disc supporter. The contract between Warner and Toshiba was still effective as of January 2008 and, therefore, Warner's estrangement at that phase truly "came as a surprise," Nishida said.
Partly because Warner released the announcement the day before "International CES 2008," the news grabbed headlines in the US. As a result, HD DVD player sales from Jan 6 to 12, 2008, immediately after the announcement, sharply dropped 88% to 1,758 units compared with the preceding week (See related article).
Toshiba announced price reductions for its HD DVD players as a countermeasure, but only failed to recover consumer confidence, which had once gone down (See related article).
What delivered a final blow to HD DVD was US largest retailer Wal-Mart's announcement on Feb 15, 2008 that it would "stop dealing HD DVD players by June 2008." Toshiba has earned unit sales by offering its HD DVD players to Wal-Mart to be sold at prices as low as US$99, fully prepared to take a loss. With this significant sales route closed, Toshiba had no choice but to end its HD DVD business.
In fact, the Blu-ray supporters group also prepared a measure to compete with Toshiba's strategy of providing low-priced products to Wal-Mart, namely the partnership it formed with Funai Electric Co Ltd, which has strong ties with Wal-Mart.
At International CES 2008, Funai revealed it will release its "NB500 series" Blu-ray Disc player in the second quarter of 2008. Street pricing is expected to be US$300. Some even said, "Street pricing might fall up to US$199 by the time of year-end sales season in 2008."
Funai's Blu-ray player features Matsushita Electric Industrial Co Ltd's 45nm-process UniPhier LSI and Sony Corp's optical head for Blu-ray. It shows a glimpse of the Blu-ray group's ulterior motive for competing with Toshiba's price reduction strategy by lowering pricing for Blu-ray Disc players from products of Funai, which is well-known for the development of low-price products.
"I knew we would gain overwhelming superiority in the player competition" following Funai's entry to the group, said an executive member of the Blu-ray supporters group.
In other words, the Blu-ray supporters group was sure that it would bring an end to the next-generation DVD war and win in 2008.
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