HD DVD players undercut Blu-ray

The new model, dubbed the HD-XA1, is slated to hit retail shelves in the U.S. in March, along with a more fully featured model, the HD-A1, which carries a list price of $799.99.

Toshiba’s aggressive pricing strategy seems designed to put maximum pressure on backers of the rival Blu-ray Disc format, which is expected to carry much higher sticker prices when the first players hit the market sometime this summer.

Among Blu-ray manufacturers, only Pioneer and Panasonic disclosed initial player prices, with consoles weighing in at $1,800 and $1,000, respectively.

Both said players would ship this summer but declined to provide specific dates.

Main Blu-ray backer Sony also said it would ship its first players in the summer but declined to provide pricing information.

At its own press event Thursday evening, Blu-ray Disc Assn. spokesman Andy Parsons of Pioneer said the organization formally has completed the technical specifications for the format, allowing hardware manufacturers and disc drive makers to begin assembling devices.

“Blu-ray Disc is ready,” Parsons said, an apparent ripose to the HD DVD camp’s new “Now Playing” slogan. “The first wave of products is ready to hit the market.”

HD DVD also picked up a potentially critical new hardware supporter in Microsoft, which announced Wednesday that it will begin shipping an HD DVD drive add-on for its Xbox 360 game system later this year. Pricing was not disclosed.

At the opening keynote session, Microsoft chairman Bill Gates also emphasized the software giant’s support for HD DVD in the upcoming new version of its Windows operating system, Vista.

Vista will incorporate native support for HD DVD playback, providing PC makers a powerful incentive to include HD DVD drives in PCs and notebooks shipped with the new operating system.

PC makers that include Blu-ray drives will have to license additional playback software from a third party.

“With both Vista and with Xbox 360, we are very committed to HD DVD,” Robbie Bach, president of Microsoft’s entertainment devices division, said at an HD DVD press conference late Wednesday.

The move to add HD DVD capability to Xbox gives the format a counter to Sony’s plans to incorporate Blu-ray into its PlayStation 3 consoles when they ship later this year.

Still, broad consumer electronics hardware support remains a weak spot for HD DVD. The only other player announced at CES was a low-end model from Thomson under its RCA brand.

The RCA player, however, is simply a rebranded version of the Toshiba HD-XA1.

The Blu-ray camp has many more traditional consumer electronics companies on board, even if only a few have so far announced player models.

Blu-ray also has more committed software support, particularly from Sony Pictures, its partly owned subsidiary MGM, 20th Century Fox and Disney, all of which have announced plans to release movies on the Blu-ray format.

Two of the three major studios backing HD DVD, Warner and Paramount, have announced plans to release in both high-def formats.

At the Blu-ray event Thursday evening, Dell Computer founder Michael Dell moved to dispel rumors that the computer maker was considering dropping its exclusive support for Blu-ray and embracing both high-def formats.

“Blu-ray is clearly the best choice for consumers,” Dell said.

The format’s potential for higher storage capacity compared to HD DVD “will preserve optical discs for the next 10 years,” he said.

Fellow PC maker Hewlett-Packard recently switched from supporting Blu-ray exclusively to supporting both formats.

According to Yoshiihide Fuji, president-CEO of Toshiba Digital Network Company, some 200 HD DVD titles will be available by the 2006 holiday season, based on current studio commitments.

The Toshiba players will be backward compatible, allowing the play of standard DVDs, and will connect to HDTV sets via the High Definition Multimedia Interface, allowing a picture resolution display of either 720p or 1080i for HD DVDs and “upconverted” standard DVDs.

Toshiba will launch a retail road tour demo targeting the Top 38 TV viewing markets in the U.S. beginning in February.

The company also will support the launch with an extensive ad campaign titled, “So real you can feel it.”

Meanwhile, Pioneer announced a Blu-ray Disc player model schedule to arrive in June that will deliver 1920x1080p output, the highest level of high-definition as well as the same HDMI connections. It also offers IP network capabilities for integration with home network systems such as Windows Media Connect.

Samsung plans to ship its Blu-ray Disc player in early spring for sale shortly thereafter, which it claims will be the first Blu-ray player on the market in the U.S. Like the others, it will play standard DVDs and CDs in addition to Blu-ray Discs and offer HDMI output and uncompressed all-digital audio/video interface on a single cable.

Samsung plans to introduce a Blu-ray recorder later this year.

In related news coming out of CES, DEG: The Digital Entertainment Group, plans to announce Thursday evening that the overall home entertainment industry suffered a slight decline in 2005, as was first reported last week by Video Business and DVD Exclusive.

DEG’s numbers peg the overall industry at $24.3 billion, with total consumer spending on DVD alone up 7.5% from 2004 to $22.8 billion ($16.3 billion on DVD sales, up 5%, and $6.5 billion on rental, up 14%). VB put the increase on DVD alone at more than 9%.

Shipments of DVD software rose less than 10% from 2004 to 1.66 billion units, according to figures compiled by Kaplan, Swicker & Simha on behalf of DEG.

On the hardware side, based on data from the Consumer Electronics Assn., DEG reports 37 million DVD players sold to U.S. consumers in 2005, nearly half of those in the fourth quarter alone. That raises the number of DVD players sold since the inception of the format to 164 million in 82 million homes.

An estimated 89 million homes, more than 80% of all U.S. TV households, have DVD capability when factoring in computers and videogame consoles.