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A full 2/3 of the high definition market will be universal players by 2012

The war between high definition formats is still raging and no one is ready to declare a winner yet. Blu-ray is currently outselling HD DVD for the most part, but it’s too early to count HD DVD out with strong sales and backing from some major motion picture studios.

Anyone old enough to recall the war between VHS and Betamax at the dawn of the VCR age can’t help but draw comparisons with the Blu-ray, HD DVD format war. In war for VCR format supremacy VHS won and relegated Betamax to niche use only. Many feel that today’s format war may never see a clear victory of one format over the other, and a recent study gives strength to that argument.

new study from ABI Research looks at the growing market for high definition drives in the computer market. According to ABI Research the high definition market in computers will be worth $2 billion USD by 2012. ABI says that the vast majority of that market, a full two-thirds to be exact, will consist of universal high definition drives capable of reading both HD DVD and Blu-ray formats.

If ABI Research is correct, a market dominance by universal players will render the format war moot as consumers would not have reason to prefer one format over the other from a hardware perspective and it would reduce some of the competitive drive behind the competing formats to negotiate exclusives for one format over another is the majority of users could view both formats.

One could reasonably expect the home entertainment marketplace to look similar in the same time span. ABI says that its research shows that about 30% of computer users currently use DVDs for data storage and the storage capacity of modern DVD media is adequate for most storage needs.

In fact, only recently have rewritable HD DVD drives become available in notebook computers, while rewritable Blu-ray drives have been available for a while. ABI Research principal analyst Steve Wilson says, “ABI Research expects high-definition drives to bring in revenues of about $2 billion by 2012. Of that, about two-thirds will be accounted for by universal drives, which can play either format. Few universal drives are sold today, partly because of their higher price. But those prices will fall to about the same as Blu-ray players by 2009, and we forecast universal player sales to exceed Blu-ray the following year."

The currently low adoption rate of universal players, such as the Super Multi Blue drives from LG, is blamed on the significantly increased cost for the drives when compared to single format drives. Frequently consumers can buy individual Blu-ray and HD DVD drives for the same cost. ABI says it expects the price of Blu-ray players to drop in 2009 as the technology matures. This will mean cheaper Blu-ray lasers which will in turn make universal drives cheaper to build.





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