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Wednesday, April 26, 2006
Matsushita: Blu-Ray, HD-DVD Will Never Merge


The companies backing competing formats for next-generation DVD technology will never again talk about forming a unified standard, an executive at Matsushita Electric Industrial Co. said on Friday, leaving it to the consumer to choose the winning side.

"We are not talking and we will not talk," Kazuhiro Tsuga, an executive officer at Matsushita, the world's largest consumer electronics maker, told Reuters in an interview. "The market will decide the winner."

Matsushita, best known for its Panasonic brand, is a leading supporter of Blu-ray, one of two competing formats for the next-generation DVD. The other format, called HD-DVD, is backed by a group led by Toshiba Corp.

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

The two sides held talks last year in the hopes of avoiding a prolonged format battle similar to the one between Betamax and VHS videotapes in the 1980s, knowing that it could discourage consumers from shifting to the advanced discs and stifle the industry's growth.

But the talks soon fizzled out, with each side reluctant to establish a format based on the other's disc structure. At stake is the $24 billion home video market and a slice of the personal computer market as PCs will be equipped with Blu-ray or HD DVD optical drives.

The backing of Hollywood was seen until recently as the main deciding factor in the format battle, but with studio support split between the camps, the focus will now shift to cost-competitiveness and the products themselves, Tsuga said.

He said it was doubtful how long Toshiba, which launched an HD DVD player this month for $499, could continue selling its next-generation equipment at such low prices, estimating that Toshiba was probably doing so at a loss.

A Toshiba spokeswoman declined to comment on whether it would make or lose money on its players, but said the price point was also aimed at helping the HD DVD industry grow.

"It's now a test of physical strength," Tsuga said.

Matsushita plans to launch DVD players later this year with a price tag likely to top $1,000. Tsuga said that Matsushita was working hard to lower production costs and that it would make a profit on its next-generation DVD products from the start.

Earlier on Friday, Matsushita announced that it would start shipping Blu-ray disc drives to PC makers, becoming the first in the industry to do so. It also unveiled single-layer and double-layer Blu-ray discs able to hold 25 gigabytes and 50 gigabytes of data, or 10 times conventional DVDs.


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