Posted by Rich on 09/29/05 21:05

Sony continues DVD battle with Toshiba

The beginning of the end of the global DVD war may be looming, but
Sony is far from conceding defeat. What's more, its business allies
have remained loyal to the Japanese electronics giant despite some
industry analysts expecting Sony will have to retreat from the market
in the longer term.

Earlier this week computer software behemoth Microsoft and
semiconductor giant Intel announced they would be complying with the
HD DVD format that has been developed by rival electronics group
Toshiba.

Toshiba and Sony have been competing against one another to come up
with the next-generation DVD that would bolster not only the memory
capacity of audiovisual discs, but also enhance their sound and video
quality. Until this summer many industry analysts had hoped that the
two companies would work together to come up with a common standard,
but such expectations were quashed by August when Toshiba declared it
would continue to develop its HD DVDs, while Sony said it would keep
to its Blu-ray discs.

Neither company has yet launched its respective product, which has
kept consumers from buying new DVD players as they await which company
will ultimately win the bigger market share in a battle that echoes
the videotape wars of the early 1980s between Betamax and VHS. Toshiba
has announced that its high-definition DVD should be on the market by
the end of this year, and Sony is likely to launch its product by next
spring.

Still, it is far too early to declare Toshiba to be the winner of the
war, even though it has the support of two of the world's biggest
information-technology companies. At a news briefing in New York
Wednesday Michael Dell of Dell Computers suggested that his company
would continue to back Sony's Blu-ray. Certainly, support from the
chief executive of the manufacturer of the most popular
personal-computer maker in the United States was a much-needed boost
for Sony executives.

Meanwhile, companies including fellow Japanese electronics
manufacturers Hitachi and Sharp have sided with Sony on the Blu-ray
format, as has Hewlett Packard among others. In addition, Sony has
been supported by some big names in the entertainment industry
including MGM, Disney and its own Sony Pictures.

Nevertheless, it is clear that the DVD war comes at a time when Sony
is facing increasing difficulties in launching blockbusting products
and making profits.

The company's recently appointed Chairman Howard Stringer unveiled a
restructuring plan for the company last Friday that includes slashing
10,000 jobs worldwide in an attempt to cut costs and bolster
profitability after over a decade of lackluster performance. In fact,
the company is expecting to post its first annual loss this year since
1997. As a result, if its Blu-ray disc loses out to Toshiba's HD DVD,
it would prove to be another major blow to the company that gave birth
to the Walkman portable music player and created the PlayStation
video-game console.

Some analysts argue that it is still far too early for Sony to back
down from the DVD war, given that much of the sales for the
audiovisual discs will come from video games. So while Microsoft will
likely use Toshiba's HD DVD for its Xbox games when the latest version
of the console is launched for the Christmas season this year, Sony
will be using the Blu-ray disc for its PlayStation3 program, which is
expected to be released on the global market by next spring.

Meanwhile, Sony executives have pointedly argued that the battle of
the DVDs is still on, stressing that the Blu-ray disc offers better
copyright protection than the HD DVD.

Both Blu-ray and HD DVDs promise better sound and imaging than current
DVDs, but Blu-ray has greater storage capacity than HD with 25
gigabytes compared to 15 gigabytes.

Copyright 2005 by United Press International

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