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Toshiba’s commercial release of its HD DVD players in the U.S. has ignited the era of high definition videos in living rooms for the masses. The Blu-ray will commercially launch only in a couple of months and those months that remain before will be enough to allow HD DVD to receive huge publicity among consumers and grab about 70% of high definition DVD players market by year end, believes research firm ABI Research.

North America represents by far the most important market for the new high-definition formats, accounting for more than 60% of all HDTVs that ABI Research expects will be shipped during 2006.

The research firm believes that in the short-term future earlier entry to the market and substantially lower price tag will give HD DVD a lead over competing Blu-ray. By the end of 2006, according to the latest update to the firm's Consumer Electronics Research Service, Blu-ray players alone will account for only about 30% of the global high-definition DVD player market, which leaves HD DVD a huge 70% chunk.

Nevertheless, as time passes, complicating factors may shift the balance and Blu-ray may receive some increases in its market share. One of the main advantages the Blu-ray may have is that Sony’s PlayStation 3 will be able to playback Blu-ray discs and when it is launched, its large expected sales figures could change the market dominance picture dramatically.

According to ABI Research’s Vamsi Sistla, director for broadband and multimedia research, Sony has another card up its sleeve: its strong relationships with the movie studios.

“However, the studios’ support is not carved in stone, but is based on the perceived size of the market for a particular technology. If studios see that HD DVD has a higher market share, or continues to increase its penetration, they could support it instead of – or as well as – Blu-ray. They don’t really care what technology is used as long as it meets their copyright protection needs and enjoys support from the vendor community,” cautioned Vamsi Sistla.

Initially the costs associated with support for two standards will probably be shared between content owners and consumers. Releasing titles on two formats simultaneously means that content owners will be less able to benefit from economies of scale, according to ABI Research. A further consequence of an ongoing “battle of the brands” is that the prices of both players and discs are likely to remain at relatively high levels longer than if there was a single standard.


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