Blu-Ray win largely benefits Sony, says analyst
By Lawrence Casiraya
INQUIRER.net
First Posted 17:10:00 04/28/2008
MANILA, Philippines--Sony Corp. may have scored a major win in the so-called format wars but it's not all rosy for the rest of the Blu-ray camp, says analyst firm ABI Research.
Earlier this year, Warner Brothers and retailer Wal-Mart announced support for Blu-Ray, forcing Japanese manufacturer and Sony rival Toshiba to concede defeat for rival format HD-DVD.
But the Blu-ray win is largely in favor of Sony for now because it benefits from its Playstation 3 gaming console doubling as a video player, according to ABI.
This year, ABI projects at least 85 percent of Blu-ray players in the market will be found in PS3s, and dedicated video players or PCs that can play Blu-ray discs won't take-off until five years from now.
"The studios better hope that people are playing movies on their Playstations. Otherwise there's very little installed base," said Steve Wilson, principal analyst at ABI, in a report.
A key challenge facing Blu-ray, according to Wilson, is that a lot of DVD players today can be "upconverted" to play on high-definition TVs and end-users are generally satisfied with the quality.
"We are starting to see an increase in the number of DVD players with built-in upconverters, and the video processing is getting better with each new generation," said Wilson.
ABI estimates that about 35 percent of all DVD players sold today include upconversion software, and would increase by as much as 60 percent in the next five years.
In an effort to spur the market, Blu-ray disc manufacturers are lowering prices and PC manufacturers are offering lower-cost configurations.
Bare-bones PCs with Blu-ray players are also coming out in the market.
Wilson, however, said: "But if you're only going to spend $500-600 on a PC, are you really going to spend 40 percent more for a built-in Blu-ray player?"
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