Investors welcomed yesterday Toshiba's signals that it may abandon the HD DVD format, surrendering to rival Sony's Blu-ray in the battle to set the next standard of high-definition DVDs (HD DVD).
Toshiba Corp is reviewing its HD DVD business and "a complete withdrawal is one of the options it is considering," an industry source said on condition of anonymity.
Blu-ray and HD DVD -- which are incompatible -- can provide cinematic-quality images and multimedia features, but the players come at a much steeper price than current-generation DVDs.
PHOTO: AFP
But a growing number of Hollywood studios and retailers have decided to go exclusively with Blu-ray, which can store more data than HD DVD but was initially seen as more expensive to make.
US retail giant Wal-Mart gave a decisive boost to Blu-ray last week.
Weekend news reports said losses for Toshiba could reach tens of billions of yen (several hundred million US dollars) if it decides on the pullout.
But investors responded positively to the news on the belief that Toshiba, which has enjoyed healthy profits in recent years, was acting quickly to stem losses.
Toshiba shares shot up ?50 (US$0.46), or 6.4 percent, to ?834 in morning trade yesterday, easily outpacing the benchmark Nikkei-225 index which gained 1.3 percent.
Shares in Sony Corp rose ?120 or 2.5 percent to ?4,970.
A victory for Blu-ray would be sweet revenge for Sony, whose Betamax lost out in a similar duel in the early 1980s to Panasonic's VHS to set the standard for videocassettes.
The camp supporting HD DVD includes Microsoft, Intel, Universal Home Studios and Paramount Home Entertainment.
The death of HD DVD has been heralded since last month, when Warner Brothers studio -- Hollywood's largest distributor of DVDs -- pulled out of an alliance with Toshiba and switched to Blu-ray.
Wal-Mart, the world's largest retailer, apparently drove a final nail into the coffin of HD DVD on Friday by announcing it would shift exclusively to selling movies on Blu-ray, following the lead of major US electronics seller Best Buy and the Blockbuster and Netflix movie rental groups.
Toshiba, whose diversifying business interests include US nuclear power plant maker Westinghouse, said yesterday it had not reached a final decision on HD DVD.
"We are cautiously assessing market movements as it is true that Warner Brothers' decision to sell titles exclusively on Blu-ray affected our sales in January," a Toshiba spokeswoman said.
Industry analysts and electronics makers maintain the format war has stifled sales of high-definition DVD players because consumers are waiting for a victor before putting down money for the expensive new technology.
"The availability of software titles decided the battle this time, just like in the VHS-Betamax war," said Yuichi Ishida, analyst at Mizuho Investors Securities.
"Movie distributors have a decisive say as DVD machines would only be an empty box without software," he said.
Ishida said withdrawal would not be so bad for Toshiba, even though it could face difficult negotiations with its partners to dismantle HD DVD manufacturing facilities.
"Toshiba is an excellent maker of electronics parts. I personally think abandoning a complete-set product is not a bad option," he said.
Toshiba will start building two flash memory plants in Japan by March next year with US partner SanDisk Corp, the Nikkei Shimbun reported yesterday without identifying sources.
The plants will be built in Kitakami and Yokkaichi with total investment of up to ?1.8 trillion, the report said.
Toshiba said nothing had been decided on the reported plants.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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