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Tuesday, September 25, 2007
Blu-ray/HD DVD War to Continue: Report

Sales of next-generation DVD players are not seen as likely to take off for another 18 months as consumers are still waiting for prices to fall and for the battle over two competing technologies to be resolved.

Forrester Research said in a report on Monday that while both Blu-Ray and HD DVD camps have "been fighting what seems to be a war of attrition for consumers' hearts and minds," few consumers are warming to either type of device.

Forrester Research believes that Blu-ray remains in a better position than HD-DVD ? but that Blu-ray strategists need to alter course.

"Blu-ray's failure to land a knock-out blow means that the format war will continue for at least 18 more months," Forrester said.

Forrester analyst J.P. Gownder stood behind his company's view that Blu-ray would eventually win out over HD DVD, but he said the Blu-ray camp needs to cut prices.

A stand alone Blu-ray player sells for about $500, while HD DVD players cost about $400, and prices are expected to drop further as the holiday shopping season nears.

Gownder said Blu-ray's content advantages are somewhat diminished since the recent decision by Viacom's Paramount studio to commit exclusively to HD DVD. HD DVD hardware prices have also dropped into consumers' preferred price range, he said.

"Weakened by these developments, Blu-ray needs to offer a viable hardware model at the $250 price point by Christmas 2007," he said in the report. "The Blu-ray camp must also stave off further studio defections, and employ more aggressive promotional tactics to counter HD DVD's recent momentum."

Forrester said typical owners of high-definition televisions are not willing to pay more than $200 on average for a new HD DVD or Blu-ray player.

"The Blu-ray camp must also stave off further studio defections, and employ more aggressive promotional tactics to counter HD-DVD's recent momentum. Failure to alter strategy would open up Blu-ray to a possible upset defeat at the hands of HD-DVD," Forrester said.

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