HD DVD Officially Passes Away
Toshiba has issued a press release stating it has "completed a thorough review of its overall strategy for HD DVD and as a result of recent market developments, the company has decided to discontinue sales and marketing of HD DVD players. Accordingly, Toshiba will begin to cease shipments of its HD DVD products to retail channels."
The company will stop shipping HD DVD hardware at the end of the March. For black-box hardware that fits into your rack and discs you can rent or buy for your library, the story is over. However, surprisingly, Toshiba left the door open on the PC side.
It will end "volume production" of HD DVD disk drives but hinted that it might still be swayed by "customer requirements." Judging from the following statement, HD DVD is not entirely dead in the PC market: "The company will continue to assess the position of notebook PCs with integrated HD DVD drives within the overall PC business relative to future market demand."
For Japanese purchasers of HD DVD recorders, a product that never made it to the U.S., Toshiba will continue to sell blank media online.
With a shout-out to its partners, Toshiba also made this curious statement: "Toshiba also intends to maintain collaborative relations with the companies who joined with Toshiba in working to build up the HD DVD market, including Universal Studios, Paramount Pictures, and DreamWorks Animation and major Japanese and European content providers on the entertainment side, as well as leaders in the IT industry, including Microsoft, Intel, and HP. Toshiba will study possible collaboration with these companies for future business opportunities, utilizing the many assets generated through the development of HD DVD."
Toshiba pledged to continue developing other technologies such as high-capacity flash memory, compact hard disks, next generation CPUs, visual processing, and wireless and encryption technologies. Though the company didn't say so explicitly, much of this smacks of downloads and other convergence technologies that may someday make optical disc formats--for instance, Blu-ray--obsolete.
At a Japanese press event, Toshiba's CEO said the company has no plans to adopt Blu-ray. HD DVD sold more than a million units worldwide including players, Xbox drives, PC drives, and (in Japan) recorders.
The news comes in the wake of multiple defections by retailers (most recently Wal-Mart) and studios (most fatally Warner). With reduced hardware and software presence in stores, and a super-majority of studios exclusively supporting Blu-ray, HD DVD couldn't keep its head above water.
Toshiba's stock jumped yesterday as rumors of the announcement leaked out. Investors may be responding positively to the prospect of Toshiba's lightened load. It will no longer have to deliver players priced below manufacturing cost or make big promo payouts to the movie studios.
Today's announcement raises as many questions as it answers. Here's the big one: Will the (more or less) end of HD DVD assure Blu-ray's mass-market success? Tell us what you think.