Blue-Laser DVD Sales Will Soar—If Standards Fight Is Resolved

More than 10 years after the invention of their key enabling technology, blue lasers finally are starting to appear in PCs this year, bringing high-density DVD recording to computers for the first time. However, continuing standards battles could slow market acceptance of blue-laser DVD drives in 2006 and beyond.

Blue lasers are engaged in a major standards battle. The Blu-ray Disc Association includes companies like Sony and Nichia, while the HD DVD Alliance counts Toshiba and NEC among its members. Because of this conflict, pricing for blue-laser-based DVD recorders now on the market is very high. Penetration into the PC market is going to be limited this year, due to the drives' high prices.

Based on this, the market opportunity in 2006 is for shipments of slightly less than 1 million blue-laser-based DVD recorders in PCs, with a revenue potential of about $285 million. If prices for blue-laser DVD systems fall due to the resolution of standards battles, they will completely replace today's red-laser systems and achieve their market potential of 546 million unit shipments and $27.9 billion in revenue by 2015, according to a long-range forecast by iSuppli Corp.