Toshiba is losing alot of money promoting HD DVD

[Sir Terrence the Terrible]

Toshiba is confirming what I and many other have always believed, they are losing alot of money promoting HD DVD.


Toshiba Likely To Post Op Profit Decline For Oct-Dec Quarter
12 December 2007 - Nikkei Report

TOKYO (Nikkei)-- Toshiba Corp is seen posting a lower October-December group operating profit than the 55.9 billion yen it booked in the year-ago period, due to plunging NAND-type flash memory chip prices and higher marketing costs for next-generation DVD recorders.

The company, however, appears to be on track to achieve its full-year operating profit target of 290 billion yen, up 12% from fiscal 2006, as first-half earnings and robust profits at other operations offset third-quarter sluggishness.

The October-December operating profit at the firm's semiconductor business is expected to surpass its year-earlier tally of 23.8 billion yen, but fall short of the 41.6 billion yen it reported in the July-September quarter. The market price for an 8-gigabit NAND-type flash memory chip is now languishing at about 4 dollars after hitting a year-to-date high of 9 dollars in August.

In addition, its operations for next-generation DVD recorders are in the red. Toshiba is spending huge sums to market its HD DVD recorders as Sony Corp. (6758) and Matsu****a Electric Industrial Co. (6752) step up efforts to promote their Blu-ray machines.

Profit is also declining at its infrastructure-related business.

As a result, the company's overall operating profit for the quarter is expected to decline.

For the year ending March 2008, Toshiba's operating profit is seen reaching 120 billion yen at the infrastructure division, up 24%, and 150 billion yen at the chip business, up 17%. This is expected to make up for an anticipated loss of at least 40 billion yen at its HD DVD recorder business.

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http://www.nni.nikkei.co.jp/AC/TNKS/...11D11JFA01.htm


FYI 40 billion yen is approximately $360 million dollars. This is alot of money to lose without having software sales to offset loses on players. They are spending a huge amount of money to promote HD DVD recorders in Japan, and currently Bluray has 98% of that market in that country. You have a $360 million dollar loss and no presence in Australia , and very little presence in Europe. A great majority of this loss is in North American operations, a loss that size for just one country. Wow!!

[pixelthis]

Well, if you "win" the format war you can make a ton off of liscenses'.
Thats what this little "war" is all about, really.
These greedheads couldnt get together and agree to share a rather large pot,
they wanted it ALL.
When you're up to your neck in alligators its hard to remember that your original idea
was to drain the swamp. Thats where tosh is right now.
The Japanese are loyal first to japanese brands, hence the blu ray success there.
No surprize, and a few cheapskates will go for HDDVD, but its not like the earlier
war between vhs and beta, the people who buy these machines will be movie lovers.
Another thing to look out for, DVD recorders, the reason laser got trounced by videotape
was its inability to record, well recordable DVD is taking over the shelves.
A lot might decide that a recorder that plays dvd (and records it) is preferrable.
Another reason to end this costly format war FAST:1:

[markw]

The Japanese are loyal first to japanese brands, hence the blu ray success there.Uh, I could be wrong, but I believe Toshiba is a Japanese brand too.

[pixelthis]

Uh, I could be wrong, but I believe Toshiba is a Japanese brand too.

I may be wrong, but its always been my understanding that Tosh hails from tiawan
(having a brain freeze, cant spell it, sorry)
Its always been a tendency to think asian brands come from Japan.
Sanyo, Samsung, LG I think, from Korea, for instance.
For awhile, (and maybe still) EVERY 27in color TV came from a plant in Mexico.
Zenith, RCA, quasar.
Rotel is english, which is why they match B&W so well, even tho they are now sadly Chinese in manufacture. So is Nad and harmon I BELEIVE.
And BANG and OLSON (or however you spell it) are designed in a styling and development studio in CALIFORNIA.
I have gotten into trouble pointing out the "warts" in manufacturing on this site before.
Pointing out that Canadian speakers are very similar, borowing from GM in selling a similar speaker at different price points, much like GM.
Peruvian the paradigm speaker worshiper is STILL PISSED that I even hinted that his precious paradigms are somewhat similar in design to top of the line Axioms.
The fact that he posted a picture of the two side by side, with all similarities very obvious,
kinda backfiring from his original intent, didnt help much:1:

[Smokey]

I may be wrong, but its always been my understanding that Tosh hails from tiawan.

Toshiba is from Japan, but Toshiba for a while have been outsourcing their CRT, Plasma TVs from from Orion in Thailand. For LCD TVs, Toshiba is outsourcing sizes 27" and under not only from Orion, but also from LG (formally Goldstar from Korea) also.

http://www.highdefforum.com/showthread.php?t=11018

[markw]

Spin it as you wish but Toshiba just as much a Japanese company as Sony.

http://www.sharedxpertise.com/file/2443/new-sony-ceo-likely-to-boost-outsourcing.html

"To maintain its leadership in the larger-size LCD TV market, the Japan-based company (Sony) has decided to partner with South Korea-based Samsung Electronics and invested approximately US$1.9 billion (each company providing half) for the construction of an eighth-generation (8G) TFT LCD production line through S-LCD, a joint venture of the two companies. Actual production is targeted to start in fall 2007, with a monthly capacity of 50,000 glass substrates, according to the both companies. S-LCD already has a 7G plant in South Korea, which started operation in April 2005"

Source for above snippet: http://www.digitimes.com/displays/a20060906A3016.html

Welcome to the new world order.

And, IMNSHO, to address the issue at hand, I think it's only a matter of time before HD-DVD goes the way of the Betamax. The format war won't be won in Japan anyway. It'll be won in the US and Europe and, even then, not so much the cost of the hardware, but by the availibility of the software. He with the most movie title wins.

[ldgibson76]

[Pointing out that Canadian speakers are very similar, borowing from GM in selling a similar speaker at different price points, much like GM.
Peruvian the paradigm speaker worshiper is STILL PISSED that I even hinted that his precious paradigms are somewhat similar in design to top of the line Axioms.
The fact that he posted a picture of the two side by side, with all similarities very obvious,
kinda backfiring from his original intent, didnt help much].

Oh Pixel!

You know you're gonna get it when Peruvian recognizes the error you made describing the speaker brand he, as you put it, "worships"! Hopefully, you just confused the brand, because he has the PSB's, not the Paradigms. Have fun!

[pixelthis]

[Pointing out that Canadian speakers are very similar, borowing from GM in selling a similar speaker at different price points, much like GM.
Peruvian the paradigm speaker worshiper is STILL PISSED that I even hinted that his precious paradigms are somewhat similar in design to top of the line Axioms.
The fact that he posted a picture of the two side by side, with all similarities very obvious,
kinda backfiring from his original intent, didnt help much].

Oh Pixel!

You know you're gonna get it when Peruvian recognizes the error you made describing the speaker brand he, as you put it, "worships"! Hopefully, you just confused the brand, because he has the PSB's, not the Paradigms. Have fun!


my bad! Paradigms are the callidac version, PSB the pontiac version (axiom being the Chevy version). Didnt want to offend anybody.
Its just that they look soooo much alike!:confused5:

[drseid]

This loss should be no surprise to anyone. If anyone would have asserted Toshiba or Sony were making money on either format at this stage of the game I would have called them "crazy."

This is a calculated risk made by Toshiba (and Sony, et al.) to lose money in the short-run in exchange for long-term potential larger profit. Makes sense to me...

---Dave

[Sir Terrence the Terrible]

This loss should be no surprise to anyone. If anyone would have asserted Toshiba or Sony were making money on either format at this stage of the game I would have called them "crazy."

Dave, bluray player manufacturers are making money on each player.


This is a calculated risk made by Toshiba (and Sony, et al.) to lose money in the short-run in exchange for long-term potential larger profit. Makes sense to me...

---Dave

I do not think it is just the loss money, its the amount. They have lost all of this money, and they are really competitive no where. Not here, not in Asia, Europe or Australia.

Two long time industry analyst announced just the day before yesterday that HD DVD PG paying Paramount/Dreamworks for exclusive releases has not bought HD DVD more market share. The weekly sales numbers are just about the same as they have been all year, 2:1. They also stated that studio releases scheduled for 2008 on HD DVD are going to seal its doom. When I looked at what has been announced, I have to agree with them.

[pixelthis]

Dave, bluray player manufacturers are making money on each player.



I do not think it is just the loss money, its the amount. They have lost all of this money, and they are really competitive no where. Not here, not in Asia, Europe or Australia.

Two long time industry analyst announced just the day before yesterday that HD DVD PG paying Paramount/Dreamworks for exclusive releases has not bought HD DVD more market share. The weekly sales numbers are just about the same as they have been all year, 2:1. They also stated that studio releases scheduled for 2008 on HD DVD are going to seal its doom. When I looked at what has been announced, I have to agree with them.

what I've been saying.
I was there when a superiour format lost out to a lesser one (beta vs vhs) because of a little extra recording time, and a few bucks in cost.
Nice to see that todays consumer is a little better educated.
They are choosing the better, more advanced technologically , format with the most storage. And nothing seems to sway the market.
NO MATTER WHAT TOSH DOES THE PUBLIC SHRUGS and buys Blu ray.
Tosh marketers know their stuff, I have said for the longest that they see the writing on the wall, have for a long time, and are trying to extricate themeselves with the loss of a minimum loss of apendages.
Sooner or later the tide turns, the winner becomes obvious , and all that is left is falling
on your sword.
SACD "won" the high end audio war, you know. THE LOSING SIDE NEVER ADMITTED IT BUT YOU CAN still get SACD in stores, players are still being made.
DVD-A was clumsey, gimmicky, deserved to lose.
Will HDDVD just fade to black like dvd-a or do you suppose there will be an offical
acknowledgement of defeat?:1:

[drseid]

Dave, bluray player manufacturers are making money on each player.



I do not think it is just the loss money, its the amount. They have lost all of this money, and they are really competitive no where. Not here, not in Asia, Europe or Australia.

Two long time industry analyst announced just the day before yesterday that HD DVD PG paying Paramount/Dreamworks for exclusive releases has not bought HD DVD more market share. The weekly sales numbers are just about the same as they have been all year, 2:1. They also stated that studio releases scheduled for 2008 on HD DVD are going to seal its doom. When I looked at what has been announced, I have to agree with them.

Sorry for the belated response...

I would not say they have lost any more money than they planned to in the first place on the format for its introduction. Their financials actually looked pretty good... maybe I will buy some of their stock. ;-)

Keep in mind, many of the losses are not specifically the player sales, but rather the free software related to the sales. Blu-ray has the same issues, and I see nothing wrong with them losing money on each sale either in order to gain market share.

I do not agree with your conclusion that HD DVD has not gained market share in the US. They *have*. The software sales 2:1 mantra that you mention (along with other Blu supporters) is irrelevant as I have said before. It is not what software they are selling now, but rather hardware... Few of those new player sales have even yielded any software sales as yet. It will be next year when the sales will show (or won't). That said, it will be interesting to see how the sharp price reductions in BR player costs from Samsung and Sony played out towards the last two weeks of the holiday season. Those could be big... I guess we will see.

---Dave

[pixelthis]

Sorry for the belated response...

I would not say they have lost any more money than they planned to in the first place on the format for its introduction. Their financials actually looked pretty good... maybe I will buy some of their stock. ;-)

Keep in mind, many of the losses are not specifically the player sales, but rather the free software related to the sales. Blu-ray has the same issues, and I see nothing wrong with them losing money on each sale either in order to gain market share.

I do not agree with your conclusion that HD DVD has not gained market share in the US. They *have*. The software sales 2:1 mantra that you mention (along with other Blu supporters) is irrelevant as I have said before. It is not what software they are selling now, but rather hardware... Few of those new player sales have even yielded any software sales as yet. It will be next year when the sales will show (or won't). That said, it will be interesting to see how the sharp price reductions in BR player costs from Samsung and Sony played out towards the last two weeks of the holiday season. Those could be big... I guess we will see.

---Dave

Big for me.
With a 100$ freebie card from short circuit, and copious overtime, I will be able to afford a Blu, and I am seriously thinking about the Sony.
Before I do I am making a field trip to a new store in Birmingham, audiovolo
(audiovolo.com)
They sell stuff like creek, opera, atoll, musichall, mark and daniel...
See if I would rather be saving up for some higher end gear, or go with a blu-ray.
This consideration wouldnt even be happening if not for the price cuts.
NOW, we'll see...:1: