« February 2007 | Main | April 2007 »
High-Def Disks? We Don't Need No Stinking High-Def Disks!
Electronics | Mar 30, 07
Microsoft's decision not to include an HD-DVD drive in its Xbox 360 Elite isn't good news for Toshiba's high-def standard, nor does it necessarily portend good things for Sony's Blu-ray or Apple TV.
The Elite has a 120 GB hard drive for expanded media storage, and its HDMI interface allows high-def output. But if they want to play HD-DVDs, consumers still have to shell out an extra $190 or so to purchase a separate Xbox 360 HD-DVD drive – see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)". However, Microsoft's gamers have another high-definition alternative, as they can simply download HD movies via the Xbox Live Video service. The larger hard drive of the Elite should come in handy for this application since high-def is a disk pig, taking up four to five GB per two-hour movie. Perhaps as or more important, note the Xbox 360 Elite can be used as an IPTV set-top box/digital video recorder, so it's conceivable that phone companies could ally with Redmond to use this Xbox to supply HD content and compete with traditional cable firms.
What does this mean for Toshiba, Sony and Apple? One might think Sony would be pleased to see Toshiba's putative HD-DVD partner eschewing a built-in HD-DVD player, but in doing so Microsoft has backed a technology that could threaten all disk-based distribution, including Blu-ray. With the Elite to be priced at under $480, it's still cheaper than the PS3 line, despite its large hard drive. I've argued in this space that, with the PS3's Blu-ray-driven high price, Sony may be sacrificing video game market share in order to promote its high-def standard ("Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky"). It would be ironic if Sony blew its video game market position to back a type of HD disk only to see the Xbox help to make all HD disk technology less relevant.
As for Cupertino, to be sure, Apple TV at just under $300 is considerably cheaper than the Elite, but of course it does not double as a top of the line game console. Further, Apple does not currently offer high-def downloads.
Needless to say, there will be a response from Microsoft's rivals. Already there's talk of an 80 GB hard drive version of the PS3, and of course Apple can move to HD content at some point. As for Toshiba, in the face of wide content availability in Blu-ray format press reports have it implementing April 1 price cuts for its line of HD-DVD players, down $100 for the HD-A2 and HD-A20 and $200 for the HD-XA2 (these would then list at $399, $499, and $799, though vendors on PriceSCAN.com are already pricing these models at or below the new lists). But with the Elite, Microsoft has undercut not only the PS3's price but the rationale behind the high def models of both Blu-ray and HD-DVD. It's been apparent for a while that HD downloads could negatively impact the high-def disk market, particularly in a world where DRM restricts the ability to record on disk (see "Blu-ray vs. HD-DVD: Lock-In, Co-Existence, Or Irrelevance?"). I'm not saying Microsoft's move or high-def downloads in general eliminate the logic of portable HD media, but neither of Japan's high-definition powerhouses can be very pleased. And with a high-def march stolen on Apple TV, the release of the Elite is not likely welcome news in Cupertino, either.
Posted by jeffrey.trester at 7:06 PM | Comments (0) | TrackBack
Blu-ray May Avoid Betamax's Fate…Even If The PS3 Isn't So Lucky
Electronics | Mar 20, 07
Press reports have sales of Sony's Blu-ray high-definition DVDs selling at about twice the rate of Toshiba-backed HD-DVDs over the past two months, yet Sony itself cautions the inclusion of a Blu-ray player in the PS3 could limit the latter's market share.
Why Blu-ray sales are outstripping HD-DVD is a matter of some debate, as is of course whether this situation will persist. Right now Blu-ray is backed by half of the "big eight" studios; three others are putting out content in both formats, with Universal being the only large player solely backing HD-DVD. With the Blu-ray partisans including Fox, Disney and Sony itself, Sony claims that the lion's share of current high-def DVD hits are available exclusively in Blu-ray format.
Yet Sony CEO Howard Stringer has reportedly made remarks to the effect that the cost of Blu-ray functionality in the PS3 is such that any failure of the new model would be attributable to its price point. That price, richer than Microsoft's Xbox 360 and the very successful new Nintendo Wii, reflects the cost of including Blu-ray in the PS3. Stringer still predicts success for the new PlayStatiom, but it's worth noting that even if sales of the PS3 fall short of those of its rival, they still increase Blu-ray market presence and could enhance that standard's competitive position versus HD-DVD (see "PS3 Postmortem?"). This strategy increases in significance to the extent that Microsoft's offering of an HD-DVD add-on for the Xbox 360 aids Toshiba's standard – see "So Xbox Has A 1080p HD-DVD – Blu-ray's Still A Cooler Name (You Can Tell By The Dropped Vowel)".
Interestingly, at least in the player market, it appears some consumers are willing to pay up for Blu-ray. For both standards, as of this writing the lowest-priced players on PriceSCAN.com are also the most popular, these being the Samsung BD-P1000 Blu-ray Player and Toshiba's own HD-D1 HD-DVD Player. Last May, shortly after its introduction, the Samsung was priced at $1,000; it now goes for a little less than $450 (see graph below).
Time Period: 5/8/2006 through 3/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
That corresponds to the introductory price of the Toshiba late last year; this HD-DVD model may now be had for less than $280.
Time Period: 11/13/2006 through 3/12/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
If introductory-level Blu-ray players are selling at a premium to HD-DVD, it may be a reflection of greater demand driven by superior content availability in the Blu-ray format. As noted in this blog before (see "Can Wintel Make Blu-ray The Next Betamax?" and "Blue-Ray Vs. HD-DVD: Lock-In, Co-Existence, Or Irrelevance?"), this can lead to a runaway lock-in effect, where greater market penetration by a particular standard incentivizes the release and purchase of more content and hardware conforming to that standard. This can amount to a vicious circle for any rival technology, driving alternate standards into oblivion.
Sony was on the receiving end of this phenomenon when it lost the Betamax-VHS war of two decades ago. Unless Toshiba quickly persuades more studios to release content on HD-DVD and/or its current backers produce more popular fare, Sony may finally have its revenge. Perhaps that scenario could be partially catalyzed by the costly inclusion of Blu-ray in the PS3. Then, even in the face of lost videogame market share, Sony may find victory in the high-def standard war worth the sacrifice.
Posted by jeffrey.trester at 8:03 PM | Comments (0) | TrackBack
Are Large Flat Screen Makers And Retailers Taking A Break From Price Cutting Each Other Into Oblivion?
Electronics | Mar 11, 07
Months of intense competition in the flat-panel television market have resulted in sharply lower prices. It now appears that, at least for the moment, prices of the larger sets may have entered a period of relative stability.
Last year, a take no prisoners contest for market share was the inevitable consequence of a plethora of set makers combined with fierce competition between online and physical retailers. The result was a dramatic price drop. Now, however, with a market perhaps constrained by supply and the fundamental costs of manufacture, some kind of equilibrium may have been reached.
Consider the Sharp LC-65D90U AQUOS Widescreen Liquid Crystal Television and the Panasonic TH-65PX600U, the most popular 65-inch LCD and plasma televisions on PriceSCAN.com, respectively. As can be seen from the charts below, each underwent a period of substantial price reduction during 2006, yet over the last few months the rate of decline has diminished significantly, with the low price actually rising at times.
Sharp LC-65D90U AQUOS Widescreen Liquid Crystal Television
Time Period: 12/5/2005 through 3/5/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
Panasonic TH-65PX600U
Time Period: 10/9/2006 through 3/5/2007
Each tick mark represents one week
Red = High Price, Blue = Average Price, Green = Low Price
It's a similar story for many of the larger flat panel televisions.
Innovation and competition being what they are, it's a good bet prices will fall further over time, but it appears that in the near term the big declines may be behind us. This is good news if you've been waiting for large flat screens to find some kind of temporary price floor. Apparently, even in the consumer electronics market, you can't beggar thy neighbor all of the time.
Posted by jeffrey.trester at 12:24 PM | Comments (0) | TrackBack
