The format war is over, with Sony's Blu-Ray format triumphing over Toshiba's HD DVD format, and now Toshiba is looking towards the future. During an interview with the Wall Street Journal, Toshiba CEO Atsutoshi Nishida talked about how it all came to an end, and where they're going from here. Here are some exceprts from that interview:
WSJ: When did you first start thinking about withdrawing from the HD DVD business?
Mr. Nishida: When Warner [Time Warner Inc.'s Warner Bros.] announced its support for Blu-ray on the 4th of January. We took a little time before reaching a final decision, so we could give people a chance to voice their opinions and we could consider all the ramifications and consequences of pulling out, such as how it would affect consumers and us.
WSJ: Most industry observers had expected the format war to continue for a while longer. Why did you decide to pull out so quickly?
Mr. Nishida: I didn't think we stood a chance after Warner left us because it meant HD DVD would have just 20% to 30% of software market share. One has to take calculated risks in business, but it's also important to switch gears immediately if you think your decision was wrong. We were doing this to win, and if we weren't going to win then we had to pull out, especially since consumers were already asking for a single standard.
WSJ: Isn't the loss of the format war a blow to Toshiba's growth strategy?
Mr. Nishida: It was just one avenue of growth. It was one of 45 strategic business units that we have. This just means we now have 44.
WSJ: Will you step away from the consumer electronics business now that you've lost the format war?
Mr. Nishida: No, we'll continue to sell standard DVD players, and we still have TVs and personal computers.
WSJ: Aren't you at a disadvantage with just standard DVD players?
Mr. Nishida: What people don't realize is that Hollywood studios are going to release new titles not just for Blu-ray but for standard DVDs as well, and there are a far greater number of current-generation DVD players out there. If you watch standard DVDs on our players, the images are of very high quality because they include an "upconverting" feature. And we're going to improve this even more, so that consumers won't be able to tell the difference from HD DVD images. The players would be much cheaper than Blu-ray players too. Next-generation DVD players are in a much weaker position than when standard DVD players were first introduced.
WSJ: Will you try to play a role in the video-downloading market?
Mr. Nishida: That's what we're hoping. We've been developing technologies in this area already, but now that we don't have the HD DVD business, I want to put even more energy into that.
CLICK HERE for the full interview.