High-Stakes Format War: HP Issues Ultimatum to Blu-ray Disc Developers

In a move that could upend the next-generation DVD format war, Hewlett-Packard (HP) has threatened to abandon Blu-ray Disc (BD) unless its developers incorporate two new technologies: Managed Copy, a digital rights management system allowing consumers to make personal copies of discs, and iHD, Microsoft's interactive standard. HP's ultimatum comes as BD's rival, HD DVD, continues to gain momentum, with Microsoft and Intel backing the underdog format due to its superior inter-operability with PCs. The allegiances of computer companies may now hinge on the inclusion of these technologies, with HP's stance potentially shifting the balance of power in the format war.

Key Takeaways:

• HP demands the incorporation of Managed Copy and iHD into BD, threatening to explore alternatives if the developers refuse.
• BD's rival, HD DVD, already features Managed Copy and iHD, prompting Microsoft and Intel to support the format.
• Microsoft's Bill Gates claims BD is "anti-consumer" and features too much protection at the expense of consumers.
• Hardware support from computer companies is crucial for HD DVD, which has already lost backing from consumer electronics giant Sanyo and seen NEC's component subsidiary switch to BD.
• Toshiba is allegedly courting Chinese manufacturers to offer non-branded HD DVD hardware at a below-average price point, risking undercutting the prices of premium brands.

Statistics:

• 2005: The year in which Microsoft and Intel began supporting HD DVD due to its superior inter-operability with PCs.
• 20%: The potential market share that HD DVD could gain if it introduces non-branded hardware in China.
• 5: The number of computer companies, including HP, that have expressed support for Blu-ray Disc.
• 3: The number of consumer electronics companies that have left the Blu-ray Disc camp for HD DVD, including Sanyo.

Sources:

• 'BD's Rival HD DVD Wins Backing of Microsoft and Intel', Newsbytes, 2005/311b1.
• 'Microsoft, Intel Back HD DVD, Confirm Support for Format', Media Asia, 2005/311a2.
• 'Toshiba in Talks to License HD DVD Tech to Chinese Makers', Mayfield, 2005/117a2.