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June 26, 2006

Toshiba to sell HD DVD player at a loss

Last week was a big week for the Blu-ray high definition DVD ([1], [2]) but there was some interesting news about the competing HD DVD format – ‘Teardown’ finds Toshiba taking a loss on HD DVD player:

Toshiba Corp. is taking a substantial loss on sales of its new HD DVD player in hopes of buying a head start in the battle for the next generation of DVD technology, according to a “teardown” analysis conducted by market research firm iSuppli Corp.

According to iSuppli’s teardown analysis, bill-of-materials (BOM) costs for Toshiba’s HD-A1 HD DVD total an estimated $674, far exceeding the unit’s $499 U.S. retail price. The estimated BOM figure excludes costs for manufacturing, testing, cables, remote control and packaging-costs that could easily push the total cost of each unit to more than $700, iSuppli (El Segundo, Calif.) said.

iSuppli’s analysis suggests that Toshiba is subsidizing the HD-A1 in an attempt to gain early market share over players that use the rival Blu-ray high-definition DVD standard, the firm said. Initial Blu-ray players, which are slated to cost $999 or more, are scheduled for launch by Samsung Electronics Co. Ltd., Sony Corp. and others this summer.

I’m not surprised at the results of the analysis, but the price of the player is only part on the equation. The availability of something to play on it is going to be critical and Blu-ray seems to have more movie studios lined up at the moment, but only time will tell and perhaps the consumers who may just sit this one out.

Posted at 10:11 pm. Filed under Blu-ray, Companies, HD DVD, Storage, Toshiba

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One Response to “Toshiba to sell HD DVD player at a loss”

  1. Toshiba second generation HD-A2 HD DVD players hit the stores -- Cool Tech Reviews Says:

    [...] Things are moving fast in the high definition DVD world although it’s still not clear whether Blu-ray or HD DVD or both will eventually get the nod from consumers. Anyhow, in the HD DVD camp after a very short run for the first generation players, Toshiba announced their second generation players (HD-A2 and HD-XA2) last September and while the HD-XA2 is just beginning to appear in stores, the HD-A2 has been available for a while and is getting uniformly great reviews. [...]

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