Another year, another dollar

Another year, another dollar

No, I won’t bore you with yet another year-end list, or a “year-in-review” piece. Instead, it’s time for the boring predictions for this coming year. 2007 had some significant turns, and my first prediction is that 2008 will be more of the same – surprises.

CES: 2008

With CES less than a week away, it only makes sense to start my predictions here. I haven’t said this on this blog yet, but I work in high-end consumer electronics and frequently talk with company representatives. Based on this knowledge and just my own logic I’m going to predict the following:

  • Samsung has dropped the price of their dual-format player to $799 and has reaffirmed their support for Blu-ray Disc. They are expected to show a 40″ OLED display (the world’s largest) which is exciting, but I also expect them to announce a BD1.1 player at $400 and a BD2.0 player at $600. I don’t expect a new dual-format player from Samsung this year. If it sells well they might continue it, but if it doesn’t I expect them to fully back Blu-ray and discontinue the dual player.
  • Sony has dropped rear-projection televisions from their line-up, so don’t expect to see any new SXRD displays at the show (unfortunately), but do expect a BD2.0 player for their ES line and a BD1.1 player in their consumer line. The 1.0 player will continue at $300.
  • There are reports that Onkyo isn’t too happy with Toshiba. Onkyo has apparently delivered just over 50 HD DVD players to Italy, according to one report. The Onkyo HD DVD player is built on the design of the Toshiba HD-XA2 and Onkyo was promised that play would not drop in price, but now that they’re twice the price of Toshiba they seem to be priced out of the market. I expect Toshiba will try to remedy this situation to preserve this name on their roster (c’est la vie, RCA). It’s tenuous, but I think Onkyo might get enough incentive to hold out with a re-badged HD-A30 player. Integra (the high-end line by Onkyo) hasn’t shipped their HD DVD player yet, so I expect the full details of that player to be announced.
  • Pioneer has a strange relationship with Blu-ray. They’re a leading developer for he format, and they chair the BDA board, but they don’t have strong hardware support. They only have one player in their Elite line (the BDP-95 is their third generation), and none in their consumer line. I don’t hold out much hope, but I would like to see a BD1.1 player for the consumer line and a BD2.0 player for the Elite line.
  • Toshiba has certainly used their HD DVD format to push their whole line into consumer’s homes last year. Toshiba hasn’t been considered a first-tier company, and they’re nearly non-existent in the custom installation market, but with their cheap HD DVD players they have certainly squeezed into a few more retailers across the country. They have already announced that all laptops in 2008 will have HD DVD drives, but I don’t expect that to happen. With laptops coming in at under $400, I don’t see Toshiba taking losses in their computer division to push the format or give up on the low-end laptop market (which is growing rapidly). I don’t expect new players to be announced considering their last players just came out a couple months ago. I also don’t expect price-drops.
  • As the main proponent of 3D technology, Mitsubishi seems set up to have a good show. They are slated to show laser-powered DLP rear-projection displays (maybe even a front-projector?) and 3D enabled DLP sets. I don’t expect a working model, but they will be talking up their future 3D enabled Blu-ray players. It would be nice to see a regular BD1.1 player from them, but they’ve so far been absent from BD hardware so I expect that to change.
  • If OLED doesn’t take off, Hitachi is ready to fill the need for ultra-slim flat-panel displays with LCD TVs coming in at 1.5″ deep. You read that right, Hitachi (who has thus far stayed away from LCD) has announced ultra-slim LCD displays. Hitachi is also in the Blu-ray camp, but they’re with Mitsubishi in that they’ve announced a player last year but have so far failed to ship. Maybe the BD1.1 spec will finally give these two companies enough courage to get in on the action. I think they’re going to be too focused on their new displays to make waves with BD.
  • I’ve seen Denon’s two BD players for sale on-line, but never from a reputable dealer. At least we know they’re actually in production so we should see them any day now. I expect them to hold their current line through the year. I expect Marantz to take the BD1.1 player and re-badge it for separate distribution channels (Denon and Marantz are sister companies under D&M Holdings).
  • Panasonic has played a huge part in Sony dropping RPTV and Fujitsu dropping plasma (that’s right, as of March Fujitsu will no longer provide consumer plasmas), so they are arguably the most powerful CE manufacturer on the planet. They popped a BD1.1 player on the market out of the blue in November, and I expect a BD2.0 player in February.
  • On the Korean front, LG is aiming to be in the top three in every market they enter – currently they’re dead last in high-def media. I don’t expect them to open the flood gates but do expect a dual-format player at $600 to undercut Samsung.

Common sense predictions

I expect Blu-ray Disc players to lock in at $400 for the majority of the year with some retailers selling at $300. All manufacturers will move to BD1.1 at the same price points as their current BD1.0 players.

HD DVD prices will also stay the same barring a huge development on the level of Paramount’s allegiance change from last year. Perhaps one of the three Chinese companies the HD DVD group announced last CES will finally get to shipping a cheap player, but probably not. The HD-51TL format will gain ground in development but don’t expect to see movies on it this year.

I expect this so-called format war will continue as it has with both sides spinning data to support their position while casting a poor light on the competing format. Maybe the BDA should see what Karl Rove is up to. If Warner sticks to their position, as I expect they will, I predict the mudslinging will really get going on both sides, and that would be the only major change in strategy.

High-def education will be the standard all companies will set-aside difference for to help grow high-def before the digital change-over in 2009. Bet Buy, Time Warner, Comcast, Panasonic, Disney and dozens of other companies are already engaged in educating the consumer that having an HD set does not mean you’re watching HD quality. A coalition will be created to push high-def this year.

Outrageous developments

If Warner drops HD DVD in support of Blu-ray, there will be some consumers upset and a letter-writing campaign, but the industry as a whole will hail them as the savior of high-def media. On the other hand, if Warner drops Blu-ray, neither format will win and fanboys will have to live it it. The key is their decision will have to be made in the first quarter. With about 700,000 HD DVD owners they would have a hard time, but if there are 1-million or more it’s more of a disaster. The same is true of Blu-ray with their millions of owners worldwide.

Adult Content isn’t a big deal. Digital Playground is reporting they’re selling Blu-ray “like gangbusters” but this doesn’t mean they’re going to drop HD DVD or that “gangbusters” is even a significant amount compared to, say, Timecop on HD DVD. It could be selling more than expected, but I don’t expect adult content will matter, as dozens of commentators have spelled out quite eloquently.

C-HD DVD is not a silver-bullet. It’s not guaranteed to even take off in China, so spill-over may not be seen for years. Blu-ray is already on the market in Bejing, and a major Chinese film group and government-affiliated hardware company both support Blu-ray as well. China is trying to push off-the-air high-def right now, so optical formats isn’t going to be a big deal until much later.

If neither format takes a significant lead in worldwide market share this year, the smaller studios on both sides will back out much like Weinstein has done with HD DVD. There will be a few, like Magnolia, who will still release simply because their goal is to push technology, but those looking for disc sales only will move to iTunes and Xbox Live.

There are rumors that Microsoft is going to change the face of game consoles for good by licensing the Xbox 360 out to other manufacturers. This would mean consoles games would be locked to this current generation for years and years but companies would be able to add Xbox support in HTPCs and other set-top entertainment centers which is a little exciting but a little scary. On the one side it means Microsoft has another monopoly, on the other it means they will limit their gaming innovation and let companies like Sony and Nintendo to push the next generation innovations.

I know this was a lot of information, but I think I owe it to you all after the slow holiday season where I didn’t give you much of anything. Please leave comments.

About Steven Kippel

Steven Kippel has worked as a systems designer for a leading high-end audio/video custom integrator in Southern California since 2003. He is responsible for researching new technologies and integrating them into existing systems and new construction projects. He has designed several high-profile systems for discriminating clients on the cutting-edge of technology. When he is not hard at work, Steven is spending time with his wife, playing with his band or promoting concerts and bands in the Inland Empire. His favorite bands include The Cure, U2, Eisley, Living Sacrifice and DragonForce.

View all posts by Steven Kippel →

7 Comments on “Another year, another dollar”

  1. a good read. thanks!

    am I correct in assuming you believe/predict warner will stay neutral and the format war will continue in 2008? (“I expect this so-called format war will continue as it has with both sides spinning data to support their position…..If Warner sticks to their position, as I expect they will, I predict the mudslinging will really get going on both sides”)

    i’m predicting warner goes blu-ray exclusive at CES 2008 🙂

    so, im interested in hearing if you think im crazy and/or how that would change the game

  2. this is an awesome prediction. But I don’t think Warner will drop either format at least not yet but you never know. looking forward to this years CES

  3. I don’t want to make any predictions about if they will or will not. I’m just observing why or why not.

  4. puuuuusssy…just kidding, i understand..

    we both know there is not a great reason for them to go hd-dvd, so if they did go blu-ray…in your opinion would it be game over?

  5. Yeesh, what a jam packed post Steven. Great work! Your point about Samsung potentially dropping the combo-player idea is interesting. If anything, I would expect combo players to pick up a bit more steam this year, especially if the stalemate continues.

    Also, let’s not forget about the 3DO and the way they attempted to license that consoles technology. If Microsoft succeeds, they’ll be the first manufacturer to make this concept work, but not the first to approach it.

  6. First off, I want to say great article and great predictions Steve!

    I think part of the reason that Samsung released the Duo HD player was because of LG. Samsung and LG are fierce competitors and either company would hate to have their long-time competitor out-do them on anything.

    If Samsung does happen to discontinue their Duo HD player, the only good thing that would come out of it would be that some consumers would be able to pick up the unit at clearance prices.

    About Pioneer: I have noticed that they typically do not release ‘consumer aimed’ products until the price-points drop to a very low level. With that in mind, I am not surprised that they have not yet released a ‘consumer’ Blu-ray player.

    I’m not so sure about Warner flipping to one format. If they do, I’ll be surprised.

    Very interesting commentary about Microsoft licensing out Xbox 360 production!

  7. Wow, I just realized how long this post was. I hope it didn’t stop people from reading it.

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