Samsung & LG cease HD DVD/Blu-ray combo player production


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Samsung & LG cease HD DVD/Blu-ray combo player production

Samsung and LG Electronics have both decided to end their production of combo HD DVD and Blu-ray players in an aim to cut costs to expand their market of next-generation storage. A Samsung Electronics spokesperson told The Korea Times that it had stopped production of the combo player since February, which came after a quick decision by Samsung at the time. This move cost the company 10 billion won (~US$9.5 million) as it had been increasing its budget for the combo player over the past two years. It has yet to calculate its full losses attributed to the withdrawal from HD DVD.

An LG Electronics spokesman mentioned that LG Electronics will stop manufacturing the Super Blu series in the second half of this year. LG introduced its BH-100 Super Blu player during CES 2007 and more recently introduced its successor, the BH-200 Super Blu with full HD DVD compliance to carry the HD DVD logo. LG has been reported to have invested 11 billion won (~$10.5 million) into its combo player business over the past three years. LG will unveil a new Blu-ray player at the upcoming IFA show, Europe's largest consumer electronics show, in an aim to catch up again with competing players.

Luckily for Samsung and LG electronics, the combo player was just a minor product, unlike Toshiba which was heavily involved in the format and lost 10s of billions of yen (100's of millions of US dollars) when it officially dropped the HD DVD format, part of which was the result of its decision to buy back HD DVD related equipment in inventory from retailers at the time.

Unlike the HD DVD only players, combo players have the advantage of being able to play Blu-ray discs, including new titles released today. This also allows consumers to playback their existing HD DVD titles without having to bring out and setup that old HD DVD player again.


Full Press Release

Samsung, LG End Combo HD-DVD Lines

By Kim Yoo-chul
Staff Reporter

In a move to cut costs for the expansion of the next-generation storage market, Samsung and LG Electronics have ended their production of disc players that can play both Blu-ray and HD-DVD movies.

``Since February this year, we have no longer been producing combo players that support the playback of HD-DVD and Blu-ray high-definition discs,’’ a spokesperson from Samsung Electronics told The Korea Times, Monday.

He added a dramatic change in the business circumstances surrounding the next-generation storage devices since the beginning of this year has made it necessary for the company to make a ``swift’’ decision on the matter.

In November last year, Samsung commercialized its ``BD-UP5000’’ combo HD disc player for U.S. consumers as a ``litmus-test.’’

Industry experts said the decision had cost the Blu-ray alliance member 10 billion won as the Korean IT giant had been increasing its budget for the player over the past two years.

On a question over financial damages after folding the business, the official said the company still needs more time to exactly estimate its losses as it has yet to finish calculating the effect of the withdrawal from the business.

Late-comer LG Electronics also plans to follow in the steps as its bigger local rival with a strong belief that the Blu-ray business will be more lucrative for the company.

``Surely, it is a very tough decision for us to halt the production of the combos, however, we will stop manufacturing the Super Blu series from the second half of this year,’’ said a spokesman from LG Electronics.

At last year’s Consumer Electronics Show in Las Vegas, LG introduced its ambitious ``BH-100 Super Blu’’ player. Its successor, the ``BH-200 Super Blu’’ drew keen attention from U.S. consumers with its distinctive multi-format capabilities.

LG reportedly injected some 11 billion won into the super-blu business over the past three years.

``At the upcoming IFA show, the biggest consumer electronics show in Europe, we will unveil a new Blu-ray player to catch up with the industry trend,’’ the spokesman said.

But it is unlikely that the South Korean companies will suffer much damage to their earnings because the combo business was a ``niche’’ market for them unlike Toshiba.

Earlier, the Japanese maker stopped producing and developing HD-DVD equipment and terminated sales from March after buying back HD-DVD related equipment in inventory from retailers after the Blu-ray alliance won the ``format war.’’

Toshiba said it is believed to have incurred a loss of tens of billions of yen in connection with its departure from the HD-DVD business.

``The time is ripe to jump into the Blu-ray business with Samsung painting a very rosy outlook,’’ another LG official said, pointing out the small number of Blu-ray titles.

Combo players are less costly and more advanced in implementing new features such as Internet content, while Blu-ray players are just strengthening their new interactive features, Internet connectivity and picture-in-picture capability.

The fight between Blu-ray and HD-DVD, including Microsoft and Intel, has mirrored the struggle between Betamax and VHS in the late 1980s.

But, Samsung and LG declined to comment about detailed consumer policies for those who have bought their combo players.

yckim @ koreatimes. co. kr