Toshiba Beaten By Sony Blu-ray Discs

18/02/08

Sony's Betamax lost out in the 1980s, but its Blu-ray has better prospects
Shares in Toshiba have gained more than 5% as speculation intensified that the electronics giant was set to pull the plug on its high definition DVD format.

The firm said it had made no decisions but admitted that it had started a review of its HD DVD business.

The format has suffered from the defection of most of the major film studios to Sony-backed rival Blu-ray.

Analysts said that an end to the war meant Toshiba could refocus on other areas and the industry would gain too.

"It doesn't make sense for Toshiba to continue putting effort into this," said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments.

"It needs to cut its losses and focus its resources on promising businesses."

Swift resolution?

Blu-ray and HD-DVD have fought to become the pre-eminent high definition format to help revitalise the $24bn global home DVD market.

But the two formats are incompatible with each other and so consumers have had to choose between machines that played only one type of disc.

As a result, many have held back to see which would become the industry standard and, like the battle between Betamax and VHS video recorders in the 1980s, this has been damaging to the industry as a whole.

The video machine war lasted a decade, so the prospect of Toshiba abandoning its HD DVD just two years after launching the player have been cheered by investors and analysts.

Toshiba shares surged 5.7% to 829 yen, topping the benchmark Nikkei 225, which rose 0.1%.
Via: BBC