Article: Philips Chief says HD taking off 'somewhat slower' than expected

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http://www.iht.com/articles/2007/08/29/business/ce.php


Philips chief says HD video catching on 'somewhat slower' than expected
By Kevin J. O'Brien
Published: August 29, 2007


BERLIN: High-definition video viewing is developing slower than the industry had expected, held back by a lack of HD content and competition between rival standards, the chief executive of the largest European consumer electronics company said Wednesday.

But the executive, Rudy Provoost, of Philips Consumer Electronics, said the Blu-ray format developed by Philips and Sony is prevailing in its battle with a competing format called HD DVD developed by Toshiba, NEC and Microsoft.

"I would say HD has developed somewhat slower than we had expected," Provoost said during an interview before the opening of the Internationale Funkausstellung, the largest consumer electronics convention in Europe, which begins Friday in Berlin. "There are highlights, such as last year's World Cup or next year's Beijing Olympics. But to give it the next big boost, the movie studios have to release more movies in Blu-ray or HD DVD formats."

Provoost gave his assessment as GFU, the organizer of the IFA convention, said Wednesday that it expected consumer electronics sales in the 10 largest European countries to rise by an average of 5.3 percent to €62.3 billion, or $85.1 billion, in the second half of this year from a year earlier.

Sales in Germany, the largest economy in Europe, are expected to grow about 2 percent to €23 billion. Roland Stehle, a GFU spokesman, said German sales had been artificially increased in 2006 by the World Cup soccer finals, held in Germany.
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The consumer electronics industry is hoping HD discs will replace standard DVDs by displaying video with at least twice the resolution of standard video, but the technology has been slow to develop as consumers wait for a clear winner in the format rivalry. Prices for some stand-alone players have dropped to $299 in the United States, and some game players that support either Blu-ray or HD DVD sell for under $200.

"I know we have been talking about this for two years now," Provoost said. "We think that if you look at the consumer proposition going forward, Blu-ray should be successful. We are seeing signs of momentum. But this emerging market is still going in many directions at the same time and the jury is still out."

In July, the U.S. video rental chain Blockbuster agreed to exclusively stock Blu-ray discs and the retailer Target, which sells both Blu-ray and HD DVD discs, agreed to exclusively stock Blu-ray stand-alone players. The major Hollywood studios are split, with Sony, MGM, 20th Century Fox and Disney supporting Blu-ray, but Paramount Pictures, DreamWorks Pictures and DreamWorks Animation supporting HD DVD.

Wolfgang Schlichting, an analyst in Miami covering the optical disc drive market for International Data Corp., said Blu-ray players held a commanding lead over HD DVD primarily because of the success of Sony's PlayStation 3. In stand-alone players, HD DVD, whose players are made by Toshiba, has a slight edge over Blu-ray, Schlichting said.

According to the Digital Entertainment Group, which promotes the Blu-ray format, there are roughly 1.5 million Blu-ray players, including Sony's PlayStation 3, in the U.S. market versus about 300,000 using HD DVD, including Microsoft's Xbox 360 device.

Philips makes players and computer drives that play only Blu-ray media.
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