More Firms Refuse to Take Sides in DVD Format War

The race between two competing formats for future DVDs — and the $24-billion-a-year home video market — appeared wide open on Thursday as manufacturers said they would support both formats.

The Blu-ray format is backed by big consumer electronics firms such as Sony Corp (SNE), Philips (PHG) and Dell (DELL) as well as most Hollywood studios.

But the HD DVD format, whose proponents are led by Toshiba, looks set to reach the market faster and offer cheaper players.

Consumer electronics maker LG Electronics and PC maker Fujitsu-Siemens both said on Thursday they would keep their options open after computer giant Hewlett-Packard (HP) said last month it would back HD DVD as well as Blu-ray.

Bjorn Sehrm, senior director Digital Home of Fujitsu-Siemens, told Reuters: "We are planning to put both in. We don't take a stand in that fight, and actually we're very sorry that fight is happening.

"Technology-wise it's something we can put into serial production within a couple of months. Whether it's a Blu-ray at the moment or HD DVD, we don't mind," he said on the fringes of CeBIT, the world's biggest technology and telecoms fair.

LG Electronics, one of the world's biggest optical drive makers and previously firmly in the Blu-ray camp, said it would prepare for both formats. But the firm said it was "still one of the strongest supporters of Blu-ray."

Both formats offer more storage capacity than the current DVD format. This is needed to store high-definition movies, whose increased picture detail means they contain four to five times more digital bits of information.


The two camps, locked in a fight that increasingly resembles the costly VHS/Betamax battle of 25 years ago, used the CeBIT fair to announce new hardware.

Philips said it would launch Blu-ray players and writers in the second half of the year, and Samsung Electronics showed off what it called the first commercial player, to be launched at $1,000 in May in the United States.

Matsushita (MC), which sells its products under the Panasonic and JVC brands, said its new Blu-ray players would be priced somewhere between Samsung's and feature-rich models from the likes of Pioneer at prices above $1,500.

Toshiba said it would include an HD DVD drive in its most expensive laptop, which doubles as a high-definition television receiver. The firm has already announced it will launch HD DVD players this month, with prices starting at $499.

The Blu-ray group brushed aside suggestions the opposing camp could tip the balance with lower prices.

"When [the DVD format] was launched, there was an array of products sold from $500 to $1,000. Oddly enough, the product that was sold at $1,000 had over 35 percent market share, and the one that was $499 had about 5 percent," said Blu-ray spokesman Frank Simonis.

"If you want a 35-inch screen and a true Dolby Digital solution, you have invested much more than the price of the playback device," he added.

Fujitsu-Siemens' Sehrm said the new drives would mainly be targeted at home-cinema enthusiasts in the beginning.

"The drives are 400 euros [$480] or something like that. It's a factor of 10 more expensive than the current ones. I don't think there is any business need for it to be honest," Sehrm said.

LG's European president, James Kim, said the firm, which unveiled Blu-ray optical drives for use in combination with a personal computer, said it expected the market to start slowly.

"It will be only in a few products [PCs]. The product has not yet hit the sweet spot," Kim said, referring to low prices, which are needed to convince cost-conscious computer makers to include a Blu-ray optical drive in their products.

Whether Blu-ray or HD DVD makes the race, it could boost sales not only of electronics but also of films and music, as did the introduction of CDs and DVDs.

Asked if consumers would have to buy their favorite movies again, Blu-ray spokesman Simonis said: "Of course! But it will enrich your life."