Digital Media Boosts CD, DVD Burning on Macs

Last week, Santa Clara, Calif.-based Sonic Solutions (Nasdaq: SNIC) debuted a new technology, Toast 7 with Blu-ray Disc support , the first ever application of that kind for the Mac. The optical disc recording technology provides Mac users with the ability to store up to 50 GB of data on a Blu-ray recordable or Blu-ray rewritable disc.

The Blu-ray disc capabilities are among a variety digital media features that are reshaping the way Mac users make CDs and DVDs at home, as Hollywood starts distributing films in HD and Blu-ray formats, said Stan Wong, general manager of the Roxio unit of Sonic Solutions.

Industry Alliances

Working with other leading computer and consumer electronics companies, Sonic Solutions last year formed the High Definition Authoring Alliance (HDAA), which is working to ensure that Blu-ray and related formats are consistent in terms of performance for consumer and professional users.

In June, the first Blu-ray DVD player was introduced, and, soon, Philips (NYSE: PHG) is introducing the BDP9000, a consumer Blu-ray product that plays CDs and DVDs. Philips also is planning to debut its PC-Writer in the third quarter, said spokesperson Lauren Naru.

"Blu-ray has the support and technological innovation behind it to be an industry leader," said Naru. "And it is supported by more than 160 of the world's largest manufacturers, movie studios, consumer electronics and PC manufacturers."

The Blu-ray technology is driving a form of convergence among computing devices, according to Sergio Almonte, chief technology officer of HotBrick, an Atlanta-based IT consulting company. "First and foremost, we have seen a migration so that such technology is Mac-compatible and this opens up new channels, new markets and new possibilities," said Almonte.

HD DVD vs. Blu-ray Battle

There is a competing technology, however, called High Definition DVD (HD DVD), which already has the loyalty of some manufacturers. A compromise may emerge similar to what Sony (NYSE: SNE) did with DVD burning technology -- develop a solution that allows the consumer to play Blu-ray, HD DVD, DVD and CD discs, said Almonte.

"Such a box will be expensive during the early years, so this could move volume consumer demand out even further," he added. "Without a single solution, we could be looking at high definition not really taking off until 2008 or 2009."

However, there is an array of technology leaders who are coming out for Blu-ray, including Sonic Solutions and Hewlett-Packard (NYSE: HPQ) , which may provide some market-making momentum.

"To convince the marketplace that Blu-ray will win, HP has said publicly that it will begin selling PCs with Blu-ray burners in them next year," noted Almonte. "Sony, which owns the rights to over 13 percent of the content in Hollywood, plans to offer the PlayStation 3 with the technology. This is well ahead of Toshiba's offering of systems incorporating HD DVD technology."

Coming Price War?

Almonte predicts that Dell (Nasdaq: DELL) and IBM (NYSE: IBM) will opt for the HD DVD format over Blu-ray.

This may continue to drive down the cost for DVD technologies, Almonte said. "With the street price for burners sitting at $70, DVD recorders at about $150, DVD players going for as little as $20, and DVD-R media priced at about 60 cents per disc, we're only now seeing the consumer demand coming close to the volumes of devices and media being produced," Almonte added.

Blu-ray has another edge that has been little talked about thus far, however -- one which may help it compete, even in a price-driven marketplace. The Blu-ray discs are produced with an advanced spin coating process technology that ensures uniform thickness on the recording discs. "This is a key element for stable and premium data recording," said Almonte. "The discs also have a hard-coated cover layer, which is a newly developed surface treatment technology. Scratched discs will be a thing of the past."