Toshiba slashes prices in HD war

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Toshiba has slashed the prices of its next-generation HD-DVD players in the key US market in an apparent last-ditch effort to save the format following a series of victories for the rival Blu-ray technology.

Sony, which is backing Blu-ray, and Toshiba have been locked in a format war for the past 18 months, leaving consumers bewildered and confused, and leading to the possibility of a damaging stalemate.

The Toshiba move signals that the Japanese electronics group, which counts Microsoft, the US software company, among backers of the HD-DVD technology, is not yet willing to abandon the format battle in spite of what industry executives believe are mounting losses.

Toshiba’s pricing announcement breaks its 10-day silence following Warner Brothers’ announcement on the eve of the Consumer Electronics Show in Las Vegas last week to dump the HD-DVD format and release movies exclusively as Blu-ray titles. That means that about 70 per cent of Hollywood’s output will now be in the Blu-ray format.

Warner Bros’ move, coupled with reports that Paramount, the Viacom-owned studio, is also poised to drop its support of HD-DVD, plunged Toshiba and other backers of the HD-DVD standard into disarray and has called into question the long-term viability of the format.

Toshiba said Monday that it had cut prices on its HD-DVD players by an average of $50 lowering the price of its entry-level HD-A3 model to $149.99 and its more advanced HD-A30 model, which features “full HD” output, to $199.99.

“While price is one of the consideration elements for the early adopter, it is a deal-breaker for the mainstream consumer,” said Yoshi Uchiyama, vice-president of Toshiba’s digital audio-visual group.

However, Toshiba’s move to reduce prices on its players while the high-definition format is still immature is likely to hit its margins, following its massive investment in the technology.

Toshiba claimed about 50 per cent of the next-generation DVD player market in the US last year. However, data compiled by Home Media Research suggests if sales of Sony’s Blu-ray capable PlayStation3 video games console are included, Blu-ray outsold HD-DVD players by three to one in the US. In Europe, the ratio was 10 to one in Blu-ray’s favour and in Japan the ratio was 100 to one.

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