NWC @ CES: Optical disk wars heat up at CES

Originally Published on EETimes

LAS VEGAS — Leading consumer electronics manufacturers in the competing HD DVD and Blu-ray Disc camps scrambled to announce market plans for their high-definition optical disk players at the Consumer Electronics Show on Wednesday (Jan. 4).

The HD disk players, carrying prices ranging from $499 to $1,800, are slated to become available as early as March, though some will not emerge until the second half of the year.

The strategy of the two camps appears to be taking two different directions. While the HD DVD group seems more intent on hitting the market as soon as possible at a competitive price, Blu-ray promoters remain vague about their launching schedules and pricing.

Though less evident in these product announcements, the lack of Advanced Access Content System (AACS) licensing could still delay the final product launch for either HD DVD or Blu-ray backers, since both systems use AACS.HD DVD backer Toshiba is leading the pack with plans to introduce, possibly by March, two HD DVD player models — priced at $499 and $799. Both models support H.264 and VC-1, as well as MPEG-2, using a new video decoder chip developed by Broadcom. The two models also connect to HDTV sets via a High-Definition Multimedia Interface (HDMI), and offer copy-protected HD content in native format of the HD DVD disk content of either 720p or 1080i.

Features included in the two Toshiba models are identical, according to Yoshihiro Matsumoto, president of Toshiba America Consumer Products LLC. While Toshiba expects to ship this spring 10,000 HD DVD players per month in the U.S., Toshiba’s Matsumoto acknowledged that the company’s March launch of HD DVD players "still depends on the availability of AACS licensing and popular movie titles."

Meanwhile, Pioneer will ship in May a consumer Blu-ray player capable of 1080p resolution with HDMI interfaces, Dolby and DTS sound — for a whopping $1,800.

The price tag for Pioneer’s Blu-ray player shocked many industry observers. "They have completely crossed over into La-La Land," said Rob Enderle, analyst with the Enderle Group (San Jose, Calif.).

Pioneer thinks otherwise. "It’s our belief this is an early-adopter market more interested in quality than low cost," said Andy Parsons, a senior vice president for product development at Pioneer Electronics (USA) Inc. (Long Beach, Calif.). Asked for reaction to the promise of $500 HD DVD drives by March, Parsons called this pricing tactic "a very drastic measure.""Anytime we have seen people try to accelerated adoption by lowering price, they have gotten their heads cut off," Parsons added.

The Pioneer executive said the HD DVD camp will not enjoy a time-to-market advantage because both groups are waiting for the AACS group to finish work on copy protection. Issues still being debated at AACS include licensing terms, whether to allow HD analog output for older HDTVs and the "compliance and robustness rules for managed copies," said Parsons.The AACS Licensing Administrator (AACS LA) founded by IBM, Intel, Microsoft, Sony, Panasonic, Toshiba, Walt Disney and Warner Brothers, is developing the copy protection system, a specification for managing content stored on future pre-recorded and recorded optical media for PCs and consumer devices.

Chris Buma, program manager at Philips Consumer Electronics (Eindhoven, Netherlands), said the AACS group agreed to offer "an interim license" while continuing to work on the final AACS spec, including such issues as whether AACS permits an analog output.

But the situation could be even more complex for Blu-ray promoters who will need to implement both AACS and another copy protection system called BD+.

BD+, designed to augment AACS, is derived from a set of technologies from Cryptography Research Inc (CRI). Sony and Panasonic modified CRI’s technology, called Self Protecting Digital Content, rather than licensing it from CRI. They also adapted it to the needs of Fox, while at the same time simplifying it somewhat for the BD spec, according to industry sources.HD DVD proponents, including Microsoft, believe AACS and BD+ could seriously delay Blu-ray for both CE and PC company implementation of Blu-ray.

Panasonic will launch Blu-ray players this summer at an undisclosed price. Philips has promised delivery of Blu-ray players in the second half of this year. Philips did not disclose pricing information. LG Electronics is introducing Blu-ray players in April or May, but offered no details on price.

Separately, Sharp said it will ship a Blu-Ray player this summer, though it was silent on specifications or pricing.

Thomson, also a founding member of Blu-ray, announced today the company’s plan to launch a HD DVD player at $499 in the second quarter. The company's spokesman said the introduction of Blu-ray players "could still happen, but for now, we are sticking to HD DVD."

Many Blu-ray backers appear to be banking on Sony’s success with Playstation 3, which is scheduled to incorporate Blu-ray disk drives. Playstation 3 alone will ensure shipment of some 4 million to 7 million Blu-Ray drives in the first year, according to Pioneer’s Parsons. In addition, as many as 60 movie titles from four studios are already in the works for Blu-Ray, he added.Sony executives were mum here on Wednesday about details for Playstation 3. They instead stressed the continuing success of Playstation 2.

One Sony official said Playstation 3 was slated to be introduced in the spring, but declined to be more specific. Another Sony official said he was fairly certain Playstation 3 would incorporate Blu-ray drives.

Nudging the content work along, Pioneer also announced it will ship in March a 5-Gbyte, half-height Blu-Ray recorder priced at $995 and aimed at commercial PC users mastering movie content for the format. It will include basic video-mastering tools.

—Additional reporting by Rick Merritt and Spencer Chin