Wal-Mart Shoots Down Cheap HD DVD Rumor

Wal-Mart has denied rumors of placing a substantial order with a Taiwan-based consumer electronics manufacturer, Fuh Yuan, and TDK in China to manufacture $250-299 HD DVD players. "The article... was full of inaccuracies and we had no participation in it. Most of the facts, including the purchase, were untrue," a Wal-Mart spokesman said. Wal-Mart, the world's largest retailer, could play an important role in determining the success or failure of a particular format.

On Thursday, the following statement appeared on Fuh Yuan's site: "We are sorry to correct the statement that we have two million HD-DVD players order from Wal-Mart and manufactured by China Great Wall Group. The actuality is that we had not received yet. We are asked to provide the schedule to Wal-Mart and cost to determine the quantity even more than two million, if the cost is good enough and timing is correct. So the capacity is under consideration. Any qualified manufactured base group will be welcome." When asked to comment specifically on Fuh Yuan's statement, the spokesperson said she could not comment on or disclose Wal-Mart's internal business with suppliers and orders.

While Wal-Mart denied that any orders had been placed, the company did say that it plans to sell both Blu-ray and HD-DVD components in its stores and online. The spokesperson added: "We expect that as prices decrease and new elements are added in the coming months that consumers will choose which format will dominate, and that could happen by the end of this year."

Link: Forum Discussion (Thanks Boz)
News source: PC Magazine

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I think theres a bit missing:

"The article... was full of inaccuracies and we had no participation in it. Most of the facts, including the purchase, were untrue, we have no intention of selling these products to our customers at a nice healthy price and have no plans to give our customers what they require.."

lol, this will be like the xbox elite when rumors first pop'd up, and they didnt say there wasnt gonna be one they just said "we have no intension of announcing an xbox elite", then a month later they did.

What's even more interesting is an article from Forbes:

Toshiba targeting to sell 3 mln HD DVD players in fiscal 2007

Toshiba Corp aims to sell around 3 mln players compatible with the HD DVD next-generation optical disc format in the current year to March 2008, up sharply from the 250,000 units it sold last fiscal year, the Nikkei financial daily reported, without citing sources.

The global market for next-generation DVD players is seen at 4-5 mln units in fiscal 2007, with Toshiba (other-otc: TOSBF.PK - news - people ) seeking a 60-70 pct share, the Nikkei said.

To better compete with companies promoting the rival Blu-ray Disc format, Toshiba plans to continue with its strategy of cutting prices and releasing low-priced players in the US, the largest market, according to the newspaper.

The company slashed prices of both entry-level and midrange players by 100 usd there this month, bringing price tags to 399 usd and 499 usd, respectively.

Well you see one thing that is not clear here is she's talking about that the announcement is not true, but again cannot talk about internal business with suppliers and orders?

"When asked to comment specifically on Fuh Yuan's statement, the spokesperson said she could not comment on or disclose Wal-Mart's internal business with suppliers and orders"

Weird eh.

Regardless, I am following this thing and it seems that it's just a preliminary defense system by Wal-mart, the deal is taking place.

Some people on AVS-Forums that claim to be involved in one way or the other with the whole deal which I don't doubt say this:

The Fuh Yuan base deal is done. They will be producing HD DVD players for Wal-Mart.

No one says the deal hasn't been done yet or that the initial order will not be completed. The posting on their web site is a bit confusing, and may be an attempt to stop people form contacting them directly.

I don't know about the significance of the recent post on their site, but it does not affect the base deal. That is in progress and sub-contracts have been made and finalized.

They are looking for the best price and availability they can give to Wal-mart for deliveries above the base amount.

Initial confirmed order quantities are over 1 Million units, its probable the 2 Million units initially mentioned in the first Fuh Yuan press release is the base number. Fuh Yuan has been asked to give quotes and estimates on how quickly numbers above the base quantity can be delivered next year.

Early estimates of full scale mass production in August were evaluated and found to be somewhat aggressive and possibly over optimistic. Physical assembly or staffing or the physical facility is not the issue, a short delay is SoC software related. Plant will be producing at that time but full scale production may slip until October, with initial batch quantities of 5-10 thousand units required to be available in the first week or so of October.

Recent meetings between Fuh Yuan and Broadcom engineers revised the schedule and engineering considerations have lead to the late August to early October production schedule slippage.

Fuh Yuan is making the chassis and loader and doing assembly.

Decoder chip and other silicon being supplied by Broadcom, probably the reference design announced at CES, or a derivative.

The optical unit is based on a Toshiba HD DVD unit design and is being manufactured by the TDK hardware unit under contract.

Wal-Mart has certified the China Great Wall manufacturing facility for Wal-Mart (probably for compliance with stuff like personnel management and environmental considerations) .

Probable limited production runs available in mid-late Oct in some selected Wal-Mart stores. Wal-Mart under control obviously of when they first start to sell the players, but some limited production available to them in October.

I have conflicting information on when the initial 2 million orders is scheduled to be delivered by. One source says all by end of 2007. Several others say, some in October, a lot (around 1 million or so ) by EOY 2007, with the rest in early 2008. The quantity produced by the end of the year may be dependent on the production throughput of the plant which is not known yet.

Its possible that under 50% of the initial 2 M units may be available by the end of the year. Big volume is expected in 2008 and as of now more than 50% of the 2M order is expected after the EOY.

Last Friday Fuh Yuan had a major meeting with Broadcom, perhaps feedback from Broadcom was the reason for the August to October full scale production delay. Broadcom may have to spin the chip or may have a delay in the completion of the embedded software or perhaps Broadcom wanted a bit of room in the overall software schedule.

Several other SoC player deals for HD DVD are now in the works. This isn't the only deal being worked on, though it is one of the largest and obviously significant because it involves Wal-Mart.

All major SoC guys like Broadcom and Sigma are working now on HD DVD solutions. Sigma's Blu-ray SoC solution is available but any units using it will not be in production before this Fuh Yuan device hits the shelves.

My sources for this include several prominent hardware guys in the industry that have been known as being creditable before and are both involved and non-involved in some aspect of the deal. The mods here (AVS-Forum) know some names, but I cannot reveal the sources