TOKYO (Reuters) – An impending end to a format war over next-generation DVDs boosted shares in both victorious Sony, in the Blu-ray corner, and Toshiba, in the losing HD DVD camp, on Monday as consumers cheered an end to confusion over which discs will carry high-definition movies.
Shares in Toshiba Corp, which a company source said was planning to axe its HD DVD format, jumped nearly 6% as analysts praised a move to cut its losses, while Sony Corp shares rose 1%.
The Blu-ray win means consumers seeking sharper movies on high-definition DVDs no longer have to choose between rival incompatible formats and run the risk of being stuck with a 21st century equivalent of Betamax — Sony’s videotape technology that lost out to VHS in the 1980s.
Having one format should also help accelerate the shift to the new technology in the $24 bln home DVD market.
Both DVDs can carry high-definition movies, but growing support from
Overall sales have so far been small as shoppers, faced with rival machines that played only one type of disc or the other, have held back.
Toshiba said on Monday that no decisions had been made on HD DVD, but widespread media reports said the company that has led the HD DVD fight was about to surrender.
The defection from HD DVD in January of Warner Brothers and its huge film library brought the tally of
Recent sales figures show many consumers had already written off HD DVD, which was also backed by Microsoft Corp.
Blu-ray accounted for 93% of next-generation DVD hardware sales in
Blu-ray recorders from Sony, Matsushita and Sharp made up about 96% of the Japanese market in the last quarter of last year, said BCN, another research house.
At the core of both formats are blue lasers, which have a shorter wavelength than red lasers used in current DVD equipment, enabling discs to hold up to five times as much data.
Toshiba had billed its format as less costly for the industry as it allowed some existing DVD-making equipment to be reused, but Blu-ray discs had space for more content to be packed in.
Hopes that ending the battle would boost disc sales sent shares in CMC Magnetics, a
Analysts gave high marks to Toshiba’s move to pull the plug on HD DVD just two years after launching its first players. It took Sony more than a decade to quit Betamax.
Nikko Citigroup raised its rating on Toshiba to “buy/high risk” from “hold/high risk”. JP Morgan maintained an “overweight” rating while predicting the elimination of sales promotion costs would add 30 bln yen ($280 mln) to Toshiba’s operating profit in the next business year from April.
Shares of Toshiba hit 829 yen, their highest close since before Warner Brothers defected but still down more than a quarter since the subprime crisis hit last year.
Sony shares have also fallen heavily over the same period, amid growing fears of a
