Digital Trends

Clearly, CES proved to be the initial battleground for Blu-ray versus HD DVD. The Blu-ray camp was well represented, with all of its members showing off their player-only models with exceptional industrial design. It has to be noted here that the initial offerings will be player-only modes and not recorders, as originally announced last year. Virtually the entire Blu-ray camp will start shipping players in the second quarter of 2006 (around June-August timeframe). Samsung will be the first company to sell a Blu-ray player in the U.S. starting in April, and to be priced at $1,000. It is expected that the majority of BD players will be in the $1,000 range. The exception is Pioneer Elite, who will have a reference player priced at $1,800. I expect that they will offer a less expensive model in their regular Pioneer line later in the year. To sum up, stand-alone Blu-ray players will cost between $1,000 and $1,800.

Pioneer Elite BDP-HD1

However, the monkey wrench in this scenario is Sony's PlayStation3 (PS3). I overhead several Sony executives talking about a $600 price point for a machine that plays next-generation games and BD movies outputting 1080p signals. PS3 will be launched—most likely—in the May timeframe to coincide with E3, which will be held in LA. If true, a $600 PS3 will make an especially compelling purchase, and may force other members of the BD consortium to rethink their price points. It also begs the question as to what Sony will charge for its BD player-only version, which is scheduled to come out in the June/July timeframe. Interesting. For gamers, PS3 makes for a very compelling gaming solution, as the BD drive is internalized instead of being outboarded (such as is being done by Microsoft with its xBox360 HD DVD drive). During the April timeframe, there will be movie titles from Sony Pictures, MGM, Paramount, and Buena Vista (Disney), among others.

On the other hand, HD DVD will launch in March 2006 with $499 players from Toshiba and RCA (these are OEMed from Toshiba) with approximately 20 titles from Warner Brothers, Universal and Paramount, to start. The movie studios who support HD DVD have noted that they will have 200 titles out by Christmas 2006, including the Harry Potter movies and Mission Impossible 3. And, it's quite possible that its price could drop to $399 by the Christmas selling season, making it a bargain. Presumably, Microsoft, who is now a staunch backer of HD DVD, is helping Toshiba offset its cost. Surprisingly, at the show, Sanyo—an original backer—will not be selling a player at this time. Hmm. And, Microsoft will be offering external HD DVD drives that can be attached to their xBox360 in a less than elegant solution.

Toshiba HD-DVD Player

With the backing of Microsoft, it certainly makes this looming optical disk format war a horse race. HD DVD will be out of the gate quickly in March with players at a very lucrative price point and some software (with more on the way). While Samsung launches their Blu-ray player in April, will BD movies be there yet? We aren't sure. And, will Samsung be overshadowed by PS3 as it arrives in May at a price point around $600? Will PS3 be compelling enough for non-gamers to buy this futuristic machine in lieu of a stand-alone player by other members of the consortium? Or will consumers see the value in a next-generation optical disk player for under $499? Clearly, the next several months will be quite interesting for HD DVD versus Blu-ray. It's unclear what the early adopter will do. And history could repeat itself. While apparently Blu-ray may be the superior format in terms of data storage capability and outputting 1080p versus 1080i, it could lose the race, just as Betamax did years ago to VHS. Or, with the backing of 85 percent of the consumer electronics industry along with Dell, Blu-ray could easily squash HD DVD. But, right now, it's anyone's horse race.

These are exciting times for CE manufacturers, with projections of more than 14.0 million DTVs to be sold in 2006, the bulk of them (12.0m) being flat-panel displays. Can the factories in Taiwan, China, and Japan pump out these displays fast enough? And, just when we thought that we had won the war for the living room, Microsoft and Intel are making another assault with Viiv and the Vista operating system along with xBox360. Apparently, Microsoft wants to see Sony lose the optical disk format war so badly that it is unofficially underwriting the HD DVD launch. Of course, everyone denies it, but we know that Sony is Microsoft's avowed enemy. And, so it goes.

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