March 31, 2006

Toshiba Launches World’s First HD DVD Player

TOKYO (Reuters) - Japanese electronics maker Toshiba Corp. on Friday started rolling out its high definition DVD players in Japan, becoming the first company to offer next-generation optical disc players worldwide.

Toshiba said its new HD DVD machines, which will compete with rival Sony Corp.'s Blu-ray technology, will sell for about 110,000 yen ($940) in Japan. Sony aims to offer Blu-ray-based players in the United States for around $1,000 in July.

The new machines are expected to breathe new life into the slowing home video market, but the failure of the competing Toshiba- and Sony-led groups to agree on a unified format has paved the way for a costly battle reminiscent of the VHS-Betamax war of 25 years ago that caused widespread customer confusion.

"Why do we need next-generation optical disc players now? Because viewers are increasingly asking for them as high-definition TVs spread rapidly," Toshiba Corporate Senior Vice President Yoshihide Fujii told a news conference.

At the core of both DVD formats are blue lasers, which have a shorter wavelength than the red lasers used in current DVD equipment, allowing discs to store data at the higher densities needed for high-definition movies and television.

The Japan launch of Toshiba's HD DVD players will be followed by the U.S. debut in April.

Toshiba, Japan's second-largest electronics conglomerate, is set to offer two models of HD DVD players, the HD-XA1 and HD-A1, in the United States for $799 and $499, respectively.

The company said it would aim to sell 600,000 to 700,000 of the new machines globally in the fiscal year ending in March 2007.

It added that it would aim to launch HD DVD-equipped PCs in the April-June period.

The prolonged battle between the two formats has divided Hollywood and the computer industry. At stake is pole position in the multibillion-dollar markets for DVD players, PC drivers and optical discs.

"The media often describes Blu-ray (discs) as high capacity and HD (DVD discs) as low cost. But HD DVD does not fall behind Blu-ray even in capacity," Toshiba's Fujii said.

"Manufacturing multi-layer discs is much easier for HD DVD."

Shortly after the announcement, shares in Toshiba closed up 1.0 percent at 684 yen, outperforming the Tokyo stock market's electrical machinery index IELEC, which gained 0.17 percent. Sony shares were unchanged at 5,450 yen.

($1=117.33 Yen)