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Monday, March 24, 2008
S. Koreans Hesitant Toward Blu-Ray Business


Despite Sony's effort to attract consumers with new fully-featured Blu-ray discs and players, LG and Samsung are not expected to sharpen their Blu-ray business for the time being.

Samsung engaged Blu-ray business five years ago with the release of the first Blu-ray product in 2005. Several announcements about upcoming Blu-ray players and recorders followed since then, with promising prototypes appearing in major trade shows. Samsung had followed the strategy of entering the "Blue" laser market by directly introducing a recording device and not a ROM device, in order to fulfill the upcoming market demand for storing data/movies, at high volumes and capacities. These moves gave an overall belief that the company could be competitive in the Blu-ray market. However, quite a few of these prototypes reached the mass production stage. Samsung released some Blu-ray players and also chose to finally support the rival HD DVD format , a decision hit by Toshiba's announcement to quit HD DVD business earlier this year.

Samsung said Monday that it doesn?t have immediate plans to massively inject fresh capital into its five-year Blu-ray business.

"Since 2005, we have been releasing Blu-ray products but we are not considering sharpening the business for the time being despite its success in the format war," a Samsung spokesperson said in an interview with Korean Times, adding that his company is still performing extensive market researches for further strategies.

"With the format war ending earlier than expected, Blu-ray manufacturers are unlikely to increase their investment in parts suppliers due to fears over lower profits," another Samsung official said, citing a smaller market size.

Samsung "rival" LG Electronics has been also active in the Blu-ray business. The company showcased its first Blu-ray players at CES in Las Vegas in 2004. However, the company's first HD player was a Blu-ray/HD DVD hybrid, after the a cross-license contract with Toshiba in 2006.

But today LG seems to keep a wait-and-see attitude toward the Blu-ray sector as our company isn?t quite sure about the prospects.

"Globally, the potential market for Blu-ray discs is very lucrative. Consumers will spend $1.1 billion on HD discs this year compared with some $300 million last year. However, the business is still in its infancy due to high prices and the rapid penetration of the high-speed Internet," an LG official said on Monday.

Both South Korean tech giants are based in a country that is considered to be a test-bed for the success of high tech gadgets, while it also one of the world?s most Internet-savvy countries with some 40 million of the population ― 46 million ― having access to the Internet.

Some critics say the wider penetration of IPTVs may hamper the future of the Blu-ray business as IPTVs enable television viewers to watch high-definition programs and use high-speed Internet, while Blu-ray products charge extra for HD-level access.

However, with the current situation in the broadband internet connections, it is going to be a long time before downloading a 30GB movie is competitive with a physical disc. Try sending someone a 12GB presentation some time..


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