Investors Cheer as Toshiba Nears HD DVD Surrender

Posted by Dave Cowl on February 17, 2008 
Filed Under: Blu-ray, Format War, HD DVD

toshiba.jpgIt seems that it is better to dump your format and cut your losses than to be the winner.

Reuters is reporting that Toshiba’s share price has risen 6% as analysts praised its move to cut its losses, while Sony Corp, whose technology is set to become the industry standard for high-definition home DVDs, rose only 2%.

"It doesn’t make sense for Toshiba to continue putting effort into this," said Koichi Ogawa, a chief portfolio manager at Daiwa SB Investments. "It needs to cut its losses and focus its resources on promising businesses."

Toshiba will likely suffer losses of hundreds of millions of dollars to scrap production of its equipment and other steps to withdraw from the business, Japanese public broadcaster NHK reported. But analysts gave high marks to Toshiba’s quick move to pull the plug on HD DVD just two years after launching its first players. It took Sony more than a decade to quit Betamax.

They seem to have forgotten that Toshiba also made Beta recorders – though perhaps they dropped that a lot sooner than Sony also…?

Via N4G 

Related posts:

  1. DreamWorks’ Katzenberg: ‘We Have Been Well-compensated for Our Support’


14 Responses to “Investors Cheer as Toshiba Nears HD DVD Surrender”

  1. Si on February 18th, 2008 1:53 am

    Nah, Toshiba is bouncing back from discounted stock, whereas there has been a growing expectation that Sony / BDA would prevail.

    I saw elsewhere (but can’t remember where), that Toshiba’s stock was lower than could realistically be expected, due to assumptions it might persist with HD-DVD for a while longer.

    I wonder how much this “praise before the fact” will impact the discussions being held at Toshiba, if the 3 options rumour turns out to be true (those options being dump HD-DVD completely, focus on Europe, or stop recorder development). Personally I think they will / should dump it completely anyway, but being pro Blu-ray I would say that wouldn’t I!

  2. Mehar on February 18th, 2008 9:29 am

    Toshiba just released a offical press statement, they said their still in the game for now. Personally, if they want to play the waiting game they should wait and see were the Blu Ray player law suits go. Suppose they are settled and Samsung lost out forcing manufacturers to rewrite how they create their players, if Toshiba already released one then they would lose more money having to recreate theirs. Of course the longer they wait the more their stocks rise, it rose 6% in 12 hours, if they keep on giving out announcments that make it look like their gonna switch their stocks could get high enough for them to make a profit this quarter.

  3. JimC on February 18th, 2008 9:35 am

    Mehar, why would Samsung being sued (and losing) have any effect on other manufacturers that have gotten it right so far?

  4. Dave Cowl on February 18th, 2008 9:53 am

    Their stock is rising based on the expectation of exiting HD DVD.

    If thy don’t do that, the stock will go back to where it was when they were expected to continue to throw money away on the format.

    If anything, the sign that their shareholders want them to drop HD DVD will hasten their decision to formally announce that. Anything else shows ignorance of their own shareholders’ desires.

  5. Mehar on February 18th, 2008 10:14 am

    Jim: Samsung was being sued for selling players that were not future proofed, if Samsung lost, others would take advantage of that and sue other makers who are doing the same thing, suppose this trend happens, manufactuers would have to come up with a solution.

    Dave: The stock rose 6% based on Rumors and Speculation, unless they come out clean and say their staying, their stock will continue to rise.

  6. Aguirre on February 18th, 2008 10:30 am

    mehar- re: your blog post about the dvd forum coming up with a blu-ray challenger at next year’s CES… that’s patently ridiculous. there is no way they’d be foolish enough to introduce a new form of HD physical media, as it would NEVER get a SLIVER of the studio support required to sustain itself. the studios – dumb as they may be – aren’t SO dumb as to shoot themselves in the foot by igniting another format war and jeopardizing a multi-billion dollar home video industry in which they are the sole victors. if there ever will be another generation of HD physical media discs, it won’t be for a long, long time.

    think before blogging.

  7. Dave Cowl on February 18th, 2008 10:31 am

    Mehar: Please explain why it would continue to rise if they don’t live up to the expectation that is causing their share price to rise?

  8. JimC on February 18th, 2008 11:23 am

    Mehar, Samsung is being sued because they failed to provide firmware fixes to allow playing released titles. It is not about future proof, as in the BD-P1200 being able to do profile 2.0, it is about the BD-P1200 not being able to play current titles and then taking weeks or even months for firmware fixes.

    I owned a BD-p1200 until I sent it back to Amazon for an 80% refund.

    The BD-P1200 didn’t suffer from future proofing so much as bad support.

  9. Mehar on February 18th, 2008 11:48 am

    Aguirre: Their is no doubt that HD DVD won’t last the year with the current situation, the DVD forum will be working on a succesor to HD DVD, no suprise their just like how the BDA is working on a succesor.

    Dave: What I meant to say was that based on a rumor the shares had jumped, even though no one at Toshiba commented on anything regarding the future of HD DVD, and they will continue to rise, because the media has made it look like Toshiba had offically announced it, sure they mention a unamned insider, but these kind of sources are not always accurate.

    Jim: I thought the players that they were sueing over were the ones incapable of being updated to 1.1 and 2.0.

  10. Aguirre on February 18th, 2008 11:54 am

    mehar, they can work on whatever they like, but by the time they come up with a feasible follow-up, blu-ray will have established a very nice spot for itself in the home video market. at that point, the studios would only be shooting themselves in the foot to support another physical medium just as blu-ray is picking up steam. thus, no matter what the DVD Forum comes up with, it’s inconceivable that it would receive any studio support, and thus the whole thing is moot. blu-ray will rule the roost for some time to come. ya dig?

  11. Mehar on February 18th, 2008 3:20 pm

    Aguirre: VHS picked up so much steam but DVD was introduced, DVD picked up a ton of steam but HD DVD and Blu Ray were introduced. Blu Ray won’t last forever, 5 years tops before a succesor comes out, and another battle will begin. You can deny it all you want, but companies all over the world have been producing new high density optical discs.

  12. Aguirre on February 18th, 2008 3:56 pm

    VHS lasted TWENTY-ONE YEARS before the birth of DVD, and DVD was 9 before by blu-ray and HD-DVD crashed the scene. obviously, these two scenarios are apples and oranges, but the fact remains that hd-dvd and blu-ray represented a SIGNIFICANT upgrade from DVD, and that STUDIOS WILL NOT JUMP ON ANOTHER FORMAT UNLESS IT BEHOOVES THEM TO DO SO, and abandoning a multi-billion dollar-producing format that is presently well on the road to success (and, in 5 years time, should have a large chunk of the market) for an identical product with another name (do you really see resolution getting better than 1080p in the near future?) makes no sense. the public won’t be willing to abandon ANOTHER format so soon after this format war… and the studios are smart enough not to risk such mass ire. mehar… if you want to continue buying physical hi-def media, just give in and buy a ps3, already.

  13. Belard on February 18th, 2008 7:43 pm

    As suggsted by myself and others – Blu-Ray will be the LAST disc media we’ll be using. There is NO development to replace Blu with something else by DVD Forum or Sony. Now, they may come out with Blu-Ray 75/100GB discs (3/4 layer) as that manufacturing process is compatible with current players. But that is it.

    Media-cards will replace Discs… and that format should last a good 20+ years. Since the player requires no moving parts and the size is already a small 1-2″ square card. The card can be expanded without changing the connector or physical shape. The replacement of the cards maybe some sort of cheaper Crystal/laser/gravity device with a flux capacitor.

    The cards can jump to any part of the movie in less than a second. Any menu locations in a blink of an eye. Start out at 50Gb, but expandable to 500GB and more.

    MP3 players & downloads are eating into the CD market. Movies/Vidos are too large for downloads, even if the enternet was 2-3x faster than it is today – it’s still TOO slow and crumblesome and DRM makes it to inflexible to be user friendly. So I think in about 10 years, the last Disc player (Blu-Ray) will be made for about $25 from Walmart, but it’ll read the media-cards.

    And if HiDef-2 comes out, the media cards will still be usable. Keep in mind, Blu-Ray discs maybe used in Theaters to play movies on the big screen with 2160P res! That is 4096 x 2160 which far blows out ANY LCD monitor on the market (1920×1080) – but with today’s 60″ and larger screens, WE WILL need something sharper than 1080.

    That much DATA, would murder consumer Blu-Ray. So a 8-12 layer BD disc would be required for theaters or Quad-HD-TV. IE: 50GB of HD data would need 200GB of space for 2160P. Currently, movie theaters are upgrading to this format and use Hard-Drives to transport the movie to the theater (no film). A 4-8 layer BD disc is exciting the studios because each disc can be made for $20~30 then destoryed, rather than a $100 Hard drive to be returned and recycled. Delivery prices go down too.

    And of course we have HVD – but by the time those 2TB discs come out in 5 years that are consumer affordable (Remember, Blu-Ray PRO has been around for about 5 years, Blu-Ray today is consumer based)

    Here is global info about stats in these formats:

    Hmmm… so how long before 1080 becomes LO-DEF and we’ll be upgrading AGAIN to 2160P ;) While broadcast TV doesn’t need to be that high, and movie cameras are becoming cheap that can record that high ($15K) – maybe in 5-10 years they’ll sell 2160P TVs for media playback? Remember, 1080 TVs have been out long before any broadcasts – people upscaled.

  14. Jesterrace on February 19th, 2008 12:39 am

Feel free to leave a comment...If you have not commented before, your comment will be held for moderation.
and oh, if you want an Avatar to show with your comment, go get a gravatar!