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Toshiba Takes Warner Punch, Pushes HD DVD

LAS VEGAS – Despite Warner Bros.’ surprise pre-show announcement that it will abandon HD DVD to go exclusively with Blu-ray high-definition discs later in 2008, Toshiba appeared stunned, but not defeated in its bid to win the HD disc war.

Speaking at Toshiba’s International CES-eve press conference here Sunday, Jodi Sally, Toshiba digital A/V group marketing VP, said: “You can’t deny that Toshiba has delivered on its promises again and again, so it is difficult for me to read all of the comments declaring that HD DVD is dead. Clearly the events of the past few days have led many of you to that conclusion. But we’ve been declared dead before.

“The reality is we entered 2007 with a majority lead in year-to-date market share. Our unit sales for the fourth quarter were the best to date for HD DVD and now nearly 1 million dedicated HD DVD players from all brands are in the market in North America,” Sally said.

“We fully believe that HD DVD is the best format for the consumer,” she added, citing the format’s mandatory specifications that required features including Web-enabled extras and picture-in-picture running commentaries since launch, and lower adoption prices compared with Blu-ray Disc players.

Many Blu-ray Disc players sold to date will not play forthcoming “Bonus View” features that allow picture in picture commentaries or BD Live, Web-enabled extras. Entry prices have also run higher for Blu-ray Disc than HD DVD players.

Akio Ozaka, Toshiba American Consumer Products CEO, said here Sunday, “We experienced strong momentum in 2007 of HD DVD. Sales of HD DVD in the fourth quarter of 2007 were the strongest yet. Therefore, we are surprised by Warner Bros.’ announcement that they plan to abandon HD DVD later this year.”

On Saturday, the company issued a formal comment on Warner Bros.’ move saying: “Toshiba is quite surprised by Warner Bros.’ decision to abandon HD DVD in favor of Blu-ray, despite the fact that there are various contracts in place between our companies concerning the support of HD DVD. As central members of the DVD Forum, we have long maintained a close partnership with Warner Bros. We worked closely together to help standardize the first-generation DVD format as well as to define and shape HD DVD as its next-generation successor.

“We were particularly disappointed that this decision was made in spite of the significant momentum HD DVD has gained in the U.S. market as well as other regions in 2007. HD DVD players and PCs have outsold Blu-ray in the U.S. market in 2007.

“We will assess the potential impact of this announcement with the other HD DVD partner companies and evaluate potential next steps. We remain firm in our belief that HD DVD is the format best suited to the wants and needs of the consumer.”

Toshiba spokespeople at CES declined to comment when asked if the company would seek legal action against the studio.

The HD DVD Promotions Group also canceled a press conference Sunday night, citing the Warner Bros. announcement.