NEC unveils chip to bridge Blu-ray/HD-DVD divide

Just as Microsoft and Sony are squaring off with the Xbox 360 and PlayStation 3, respectively, so too are their preferred next-generation disc formats. Microsoft is backing Toshiba's HD-DVD format with next month's release of an HD-DVD add-on for the 360, while Sony built Blu-ray functionality into the core PS3 hardware.

A truce between the Blu-ray and HD-DVD worlds is still probably a way off, but NEC has come up with a chip that could help companies bridge the gap. The chip, essentially a controller, works in both Blu-ray and HD-DVD players. One chip that works with both standards could cut the cost of building a player that accommodates Blu-ray and HD-DVD discs.

The chip will start shipping in April 2007, NEC said. The appearance of a combination player, however, could still take time. Companies such as Pioneer and LG announced plans to come out with combination players, but later backed away.

Cost is the main culprit. Blu-ray players cost about $1,000, and the player/recorders, which won't be coming to the US immediately, run about $3,200. HD-DVD players start at around $500, but the recorders cost about the same. The high price, in part, is due to components. Since mass manufacturing has just begun, the parts still cost a lot, although prices will decline in 2007.

Even with the expected price declines, building a hybrid player would involve redundant components. Other components that can handle both standards would also likely have to be developed to bring the price of a hybrid player down.

But royalties are also a factor. The companies that invented the standards could make millions in licensing fees over the next decade if their standard gets adopted widely. Building a combo player, therefore, would require paying royalties to both camps.

Further complicating the matter are the high emotions generated by the dispute. Last week at the Ceatec trade show in Japan, reporters asked Kazuhiro Tsuga, an executive officer at Matsushita Electric, a firm member of the Blu-ray camp, about the possibility of Blu-ray/HD-DVD combo players hitting the market.

"That is stupid, stupid," he said, noting that the cost would be high. Matsushita sells products under the name Panasonic in the US.

Still, other manufacturers are intrigued by the idea, especially if the format wars hurt sales. Hitachi, which is concocting a camcorder that will record directly to Blu-ray discs, said it will study the issue of a combo recorder after Blu-ray is established in the market.