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Toshiba Pulls Plug On HD DVD

Tokyo – Toshiba’s official decision, here today, to drop HD DVD ends days of speculation on the fate of the format after it lost support from key retailers last week and garnered celebratory comments from Blu-ray backers.

In its statement Toshiba said after a “thorough review of its overall strategy” it had decided to no longer develop, manufacture and market HD DVD players and recorders.

The company’s decision was due to “recent major changes in the market” which included Netflix, Best Buy and Wal-mart backing Blu-ray last week, and a flurry of anonymous speculation this past weekend. The company said it will continue to provide full product support and after-sales service for all owners of Toshiba HD DVD products.

“We carefully assessed the long-term impact of continuing the so-called ‘next-generation format war’ and concluded that a swift decision will best help the market develop,” stated Atsutoshi Nishida, Toshiba president and CEO. “While we are disappointed for the company and more importantly, for the consumer, the real mass market opportunity for high definition content remains untapped and Toshiba is both able and determined to use our talent, technology and intellectual property to make digital convergence a reality.”

Going forward, Toshiba said it will “continue to lead innovation, in a wide range of technologies that will drive mass market access to high definition content. These include high capacity NAND flash memory, small form factor hard disk drives, next generation CPUs, visual processing, and wireless and encryption technologies.”

The company said it expects to make forthcoming announcements around strategic progress in these new areas.

Toshiba will now begin to reduce shipments of HD DVD players and recorders to retail channels, and expects to be out of the HD DVD business by the end of March 2008.

This includes ending volume production of HD DVD disk drives for PCs and video game players in the same timeframe, but “will continue to make efforts to meet customer requirements.”

“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,” Toshiba said.

Toshiba said it will provide ongoing product support and after sales service for purchasers of HD DVD products. Customers can contact, 1-888-MY HDDVD (1-888-694-3383) operational assistance for players and further guidance on HD DVD products.

The decision will not include the company’s commitment to standard DVD, and the company will continue to market conventional DVD players and recorders, as well as contribute to the development of the DVD industry through its membership in the DVD Forum, which is the 200-member international organization involved with defining optimum optical disc formats for the consumer and the related industries.

Toshiba said it 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 said it intends to continue collaboration with its partners for future business opportunities, utilizing the many assets generated through the development of HD DVD.

Members of the Blu-ray Disc camp celebrated Toshiba’s decision.

“We in the Blu-ray Disc Association are very happy that this long format war is officially over,” said Andy Parsons,Blu-ray Disc Association U.S. Promotions Committee chairman, and Pioneer Electronics senior VP.

“Now the task ahead for our member companies is to promote the Blu-ray Disc format as the best way to bring premier quality high definition content into consumers’ lives.”

In a statement from Sony, the company said: “Overwhelming support from all the relevant industries, including Hollywood studios, consumer electronics and IT companies, retailers and video rental stores is clear proof that consumers have chosen Blu-ray as the next generation optical disc format. We believe that a single format will benefit both consumers and the industry, and will accelerate the expansion of the market.

“Blu-ray has been and will continue to be a core part of Sony’s HD World strategy,” the statement continued. “We will continue to promote the benefits of HD throughout the value chain including Blu-ray products, Bravia LCD TVs, PlayStation 3, VAIO PCs, camcorders, entertainment content, and broadcast and professional products.”