Toshiba still mum on HD DVD future, investors happy in hope of format dénouement

Following speculation last week that Toshiba would soon abandon the HD DVD format that it had helped bring to market, onlookers were waiting with bated breath for a follow-up statement from the Japanese company on Monday morning.

Even with apparent industry insiders claiming that Toshiba would drop HD DVD support, a company spokeswoman told the AFP that it is still considering its options.

"We have not made any official decision yet," a Toshiba spokeswoman said, though acknowledged that Warner’s move to Blu-ray Disc did have a ripple effect. "We are cautiously assessing market movements as it is true that Warner Brother's decision to sell titles exclusively on Blu-rays affected our sales in January."

According to one unnamed source, "a complete withdrawal" is one of the options Toshiba is considering. If it were so, it would leave the format without any major maker of hardware, effectively terminating HD DVD quicker than through studio support loss.

Fuelling Toshiba’s possible action to pull the plug on HD DVD are the recent losses of Wal-Mart, Netflix and Best Buy support in the U.S.

Last week, Jodi Sally, Toshiba’s VP of marketing in the U.S. gave the statement, "Based on its technological advancements, we continue to believe HD DVD is the best format for consumers, given the value and consistent quality inherent in our player offerings."

"Given the market developments in the past month," continued Sally, "Toshiba will continue to study the market impact and the value proposition for consumers, particularly in light of our recent price reductions on all HD DVD players."

While HD DVD fans will be unhappy to see the end of the format, Toshiba’s investors appear optimistic. Shares of Toshiba rose 6.4 percent Monday morning on the Tokyo Stock Exchange, according to Bloomberg.

"Quitting would be positive for Toshiba in the mid- to long-term as it can back out of the business before the wound gets any deeper," said Mitsushige Akino, CEO at Ichiyoshi Investment Management Co. in Tokyo.

Update 2/18/2008: Toshiba Japan made an extremely brief comment on the HD DVD situation this morning, stating, "The media reported that Toshiba will discontinue its HD DVD business. Toshiba has not made any announcement concerning this. Although Toshiba is currently assessing its business strategies, no decision has been made at this moment."

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