Blackfriars' Marketing

Wednesday, January 05, 2005

Toshiba recasts its audio/video business as a storage business

Toshiba CEO and President, Yoshihida Fujii, said "The PC paradigm is over. We are introducinga new paradigm. Toshiba is working with content holders and providers to create a new audio visual world." Toshiba is the major proponent of the HD DVD format and is a major vendor of hard disk drives (they make the specialized miniature hard drives in iPods, for example), and it is planning to introduce Surface-conduction Electron-emitter Displays (SED) in 2005.

Toshiba is particularly aggressive in integrating hard drives and DVD recorders (remember, they make their own hard drives), and already sells 600 Gigabyte drives integrated with DVDs in Japan, and they plan 1 terabyte drives next year. The company clearly has the ability to record a lot of HDTV content

Toshiba believes that the 30 GB capacity of HD DVD is plenty for HDTV, since it is capable of playing back 8 hours of HDTV at that capacity.

On of Toshiba's most notable introductions is the promotion of its gigastyle hard-drive CE systems. The gigastyle prodcuts include a digital music player, named Gigabeat, with a color display; think of this as a 60 GByte photo iPod. Gigabeat, however goes the iPod one better by ripping its own CDs from its cradle. It uses WMA and MP3 music formats. This product arrives in 2Q 2005.

Gigastyle also includes a HD camcorder named gigashot, which uses a 0.85 inch hard drive for videos and an up to 5 megpixel digital camera. Surprisingly, it can take stills and video at the same time.

Toshiba also introduced Tivo-based personal video recorders.

Toshiba noted the same trend identified yesterday by the CEA: the money in TV is shifting to flat panels, despite the fact they still have a healthy business in CRT-based TVs. They will be introducing their SED flat technology this year, which will support Ultra HD resolutions with superior contrast and brightness over plasma and LCD. As is typical with new high tech products, it will be priced at a premium. Don't expect it to be price competitive by 2007.

From a communication point of view, Toshiba's messaging was much less clear and precise than LG's. While there was a bit more flash in places (they brought out a Harley chopper at the end of the press conference), their overall strategy was harder to understand and more convoluted. Their story suffers from too much information, and as a result, we expect press coverage of their products to be poorer than other companies with clearer messages.