Consumers can purchase HD DVD players for less than $200 and Blu-ray player prices have dropped to below $300 at some online venues. This is just the beginning, according to Bill Foster, a senior technology consultant at research firm Understanding & Solutions. "Drive, chipset, and other system components are now benefiting from economies of scale," Foster said.
"In early 2008, we're going to see the bill of materials for a basic high-definition player, in either format, weighing in at less than $150," Foster said, "and that's going to impact the high street very soon, providing the consumer with a choice of low price players that allow consumer electronics companies a margin for profit."
The research group predicted that if both formats continue to sell, HD DVD and Blu-ray players will retail below $100 by 2011. "Crucially, Blu-ray benefits from stronger Hollywood Studio support and represents a greater proportion of high definition disc production volumes and disc sales," said Jeremy Wills, a consultant at Understanding & Solutions.
Notably, Blu-ray still represented more than 70% of HD movie sales in the U.S. during the week Transformers was released on HD DVD. As demand grows and manufacturing volumes build, Wills predicted, the market will see the costs of releasing on two different formats start to add up. Wills suggested that there might be surprises just around the corner, and that we could see a lot more clarity on these issues in 2008.
Despite all this action in the HD movie market, consumer confusion still persists. The importance of providing a coherent message through strong retailer support is essential, the report asserted, as many buyers still don't know what additional inputs are required in order to view HD content on an HD TV.
Still, consumer interest in new displays continues unabated. By the end of this year, 34% of U.S. homes will own an HD display, rising to 90% by 2011, according to Understanding & Solutions. In Europe, by contrast, the uptake is slower, with 20% ownership by the end of this year, rising to 66% by 2011. (AP)
Broadcasters continue to play their part in driving demand, with almost 100 HD channels now available in the U.S. However, European operators in countries such as France and the UK still are playing catch-up, the report noted, hampered by a lack of HD content.