Although the Blu-ray format is indisputably more advanced than its competitor HD DVD, because of the manufacturing costs it will not become the dominating format, according to a report from a research firm. Nevertheless, based on the notes from the analysis, eventually Blu-ray may take larger market share.

In its “Global Optical Storage Industry Report, 2006-2007” Research and Markets firm analyses, apart from other things, the trends in the blue laser optical drives market, where Blu-ray fiercely competes against HD DVD format to become the replacement for contemporary DVD.

The firm claims that while “it is widely acknowledged that Blu-ray will be the development trend” in spite of HD DVD “being presently supported by most manufacturers” of optical drives. The report recognizes that due to low price, HD DVD also sells very well in America, but, it informs, some manufacturers hold HD DVD as the transitional product, and they invest a lot into the research and development of Blu-ray driver.

The main issues for the Blu-ray camp so far are considered to be high manufacturing costs and instabilities with the PlayStation 3 supplies, which made optical drives manufacturers to switch to “wait and see strategy” before starting mass production of the new generation of optical drives.

“The high cost of Blu-ray also hampers the development of Blu-ray. The majority of manufacturers believe that there will not be a strong market growth for Blu-ray until 2009. And HD DVD will still be the mainstream in the market during 2007-2009,” the report says.

Globally, the four Optical Driver giants are HLDS (Hitachi-LG Data Storage), TSST (Toshiba Samsung Storage Technology), Sony NEC (Optiarc) and LiteOn. According to Research and Markets, LiteOn might top the world after obtaining the orders of PBDS (Philips Benq Digital Storage) in 2007. Besides, other companies have to struggle for survival under the big pressure from those large counterparts.