Even though the high definition video discs are just around the corner, due to the high manufacturing costs of Blu-ray and HD DVD players and broad availability of conventional DVD devices and content, the market of traditional DVD will continue growing, according to research firm In-Stat. DVD player and recorder units will have a combined market of 176.6 million units sold worldwide in 2010, up from 140.8 million units in 2005. The forecast for 2006 predicts that Europe will be the strongest region for DVD players and recorders with a combined total of 38.4 million units sold.
The significant growth of the traditional DVD market is predicted as a result of very high manufacturing costs of blue-laser players: with the servo chipset, optical pick-up, H.264 decoder and royalties making up the majority of the cost, the initial estimates for the bill of materials for blue-laser disc players is over $400, according to In-Stat. Most of the costs are forecasted to decline considerably by 2010, except for royalties. The promise of the guaranteed premium royalty bounty is obviously at the heart the high definition DVD format wars. "The future of this market though is all about high definition DVD players based on 'blue laser' technology; however, the future may be farther off than we would like. These players will enter the market at premium prices, and as there has been no compromise between the HD-DVD camp and the companies that sponsor Blu ray technology, a format battle seems inevitable. There will be some casualties, companies and consumers alike," said Chris Kissel, In-Stat analyst.