Following a very long agony

Feb 19, 2008 09:49 GMT  ·  By

The moment everyone's been expecting for the past couple of weeks has finally arrived! Thus, after receiving a couple of decisive blows over the past few weeks, culminating with Wal-Mart's announcement, Toshiba has finally decided to acknowledge the fact that it has lost the next-gen format war and declared that it has decided it will no longer develop, manufacture and market HD DVD players and recorders.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded that a swift decision will best help the market develop," said Atsutoshi Nishida, President and CEO of Toshiba Corporation, at the press conference held early this morning. "While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

Of course, this move won't occur suddenly, but in a few steps. Thus, Toshiba will begin to reduce shipments of HD DVD players and recorders to retail channels, with the complete halt being slated for March. Moreover, the company also plans to end volume production of HD DVD disk drives for such applications as PCs and games in the same timeframe, but will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand.

Nevertheless, as the company's statement reads, "This decision will not impact on Toshiba's commitment to standard DVD, and the company will continue to market conventional DVD players and recorders. Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures, and DreamWorks Animation and major Japanese and European content providers on the entertainment side, as well as leaders in the IT industry, including Microsoft, Intel, and HP". It remains to be seen whether the respective parties will be willing to continue working with Toshiba, though.

As expected, this move comes at a pretty high cost for the Japanese company. Thus, as various Japanese sources report, we're talking about hundreds of millions of dollars lost, not to mention the fact that Toshiba will now have to shut down its production lines, which will most likely impact, at least to some extent, the Japanese economy.

However, despite of this very tough blow, Toshiba's not dead, not by a long shot, anyway. Thus, in the same press conference, the company's representatives have declared that they'll now focus on such convergence fields as NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies.

So, a chapter of technological history is over. The format war, which has actually slowed down HD adoption, has finally ended, with Sony's Blu-ray proving to be the victor, despite of all the adverse odds. It's a sweet revenge for Betamax and a confirmation that the marketing strategy engineered by Sony, based largely on the PS3, has finally paid off. Unfortunately, it's also a pretty bad piece of news for all those early HD DVD adopters, who're left with a pretty useless machine, at least on the long run.

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