Toshiba quits HD DVD leaving market to Sony

Toshiba is reportedly dropping its HD DVD format

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Monday, 18, Feb 2008 02:13

Toshiba, the leading promoter of HD DVD, has pulled out of the business leaving the next-generation DVD market open to the Sony-led format Blu-ray.

Blu-ray, the alternative to HD DVD, has support from Wal-Mart and several major Hollywood studios.

The two formats have been competing to become the industry standard, but consumers have been holding back from investing in a new player, unwilling to risk buying the equivalent of Sony's Betamax, which lost out to VHS in the 1980s.

Toshiba's move is now likely to encourage uptake of the Blu-ray format.

"We carefully assessed the long-term impact of continuing the so-called 'next-generation format war' and concluded a swift decision will best help the market develop," said Atsutoshi Nishida, president and chief executive of Toshiba.

"While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality."

The electronics company said it will focus on high-capacity NAND flash memory, small-form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies.

The decision will be a blow to Microsoft, which has adopted the format for its Xbox, while Sony included a Blu-ray player on its rival console, the Playstation 3.

Toshiba's shares rose 6.53 per cent on the news to JPY835 (£3.99).