Toshiba to stop HD/DVD production

ICT Materials 19 February 2008 05:37 (UTC +04:00)

( dpa ) - The Japanese electronics firm Toshiba was expected to announce an immediate withdrawal from its HD/DVD business later Tuesday, according to a newspaper report.

The well-respected financial newspaper Nikkei reported Tuesday that Toshiba has decided to immediately stop development and production of HD/DVD players and recorders, and to stop sales of the technology by the end of March.

Toshiba president Atsutoshi Nishida was to make the announcement later Tuesday, the newspaper said.

It was not clear what would happen with HD/DVD discs, which Toshiba supplies to Hewlett-Packard and other companies. But Toshiba was also considering stopping their production as well.

Toshiba has been the motor behind HD/DVD technology, but is losing customers to Sony Corp's Blu-ray high-definition standard. Last week, the world's largest retailer Wal-Mart said it was shifting sales exclusively to the Blu-ray system, following similar moves by Best Buy, the largest US consumer electronics chain.

Netflix, the online DVD rental leader, has said it would shift to Blu-ray. Earlier, Warner Bros Entertainment, Metro-Goldwyn-Mayer Studios, Sony Pictures, Twentieth Century Fox and Walt Disney joined the Blu-ray camp.

Toshiba shares rose Monday to a seven-week high on Tokyo markets on speculation it would abandon the HD/DVD technology.

Toshiba has sold about 1 million recorders, players and computer disks with the HD/DVD format worldwide, including 600,000 to 700,000 in the US and Europe, Nikkei reported.

Toshiba intended to take back 100,000 units from dealers, but did not plan to compensate consumers.

The Blu-ray Disc and the HD/DVD are formats for videos with higher level picture definition (high definition), but both have faced an uphill fight for consumer following.

"Quitting would be positive for Toshiba in the mid- to long-term as it can back out of the business before the wound gets any deeper," Mitsushige Akino, chief investment officer at Ichiyoshi Investment Management Co. in Tokyo, was quoted as saying by Bloomberg financial news service.

A single-sided, single-layer Blu-ray disc can store 25 gigabytes, compared with 15 gigabytes for HD DVD and 4.7 gigabytes for a conventional disk, according to the Nikko Citigroup report quoted by Bloomberg.

The HD DVD disks are cheaper to produce because their structure resembles the preceding technology more closely, it said.