Toshiba may surrender to Blu-ray, finally

Chicago (IL) – Toshiba may finally concede in the high-def disc format war if we believe a media report claiming that the company may roll out its first Blu-ray player before the end of the year. Of course, if true, this was not so much a technology issue as the company has had access to Blu-ray products since early 2006, but a strategic and certainly emotional decision to give in to the format it so hard tried to beat.

Consider it the final phase in the HD format war. Toshiba may be releasing its first ever Blu-ray player, after having dropped its own contender, the HD DVD format, in February of last year, and trying to pitch an enhanced DVD player as a cheap alternative to Blu-ray late last year. Japan’s Yomiuri newspaper was reporting last week that Toshiba is now preparing the BD 18 player for a 2009 release.

The article apparently had been removed by the publication without comment by the time of this writing.

The release of a Toshiba Blu-ray player has been a question of when, not if. The company announced the shutdown of HD DVD on February 19, 2008 and has repeatedly stated since then that Blu-ray players are pricey, but has remained quiet about its Blu-ray product plan otherwise. Mainstream Blu-ray players have broken the $300 barrier in 2008 and are now close or below the $200 mark, apparently convincing Toshiba that there is not enough room for a premium DVD player equipped with its “eXtended Detail Enhancement” XDE technology. And it seems that Toshiba is finally over its $1 billion HD DVD adventure.

From a technology point of view, the production of a Blu-ray player has never been an issue for Toshiba. Back in January of 2006 we reported that Samsung would be producing Blu-ray players through Toshiba Samsung Storage Technology Korea (TSST Korea), a joint venture between Toshiba and Samsung. Toshiba holds 51% of that business, Samsung the remaining 49%. TSST Korea was founded in April of 2004 as a subsidiary of TSST.  

Back in 2006, we were told that TSST is an “independent company” that Toshiba understands as being a developer of both formats in a “neutral position.” But TSST has been focused on products that were in line especially with Toshiba’s product strategy: For example, the company announced a slim HD DVD drive in September 2005, long before the actual introduction of HD DVD players. Even if TSST Korea seemed to have catered to Samsung’s needs with Blu-ray players, it was clear that Toshiba is covering its bases just in case HD DVD would fail. By the way, Sony did the same through a joint venture with NEC, which guaranteed the company access to HD DVD manufacturing equipment.

Toshiba has come a long way and may enter the Blu-ray market when there is still room to claim its stakes. According to the Consumer Electronics Association, unit shipments of Blu-ray players will jump 112% this year, reaching nearly six million. Even as prices drop, revenues are expected to top $1 billion for the first time, representing an increase of 48% over 2008.