By Kim Yoo-chul
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.