The white flag has been waved in the battle for high definition DVD supremacy. Toshiba and Sony have been locked in a fierce fight to have their competing technologies become the industry standard in this category. Yesterday, Toshiba announced that it would end production of its HD-DVD products and exit the market within a couple of months. This decision in effect makes Sony's Blu-ray technology the industry standard.
The news could not have been better for Sony. The company has been seeking to regain the success it experienced in the 1980s and 1990s. More importantly, Sony was able to avoid a repeat of history as it had experienced two major defeats in technology platform wars in the past. First, Sony lost the video cassette player war in the 1980s as the industry adopted the VHS format over Sony's Betamax. Second, Sony's effort in the digital music download business was thwarted by the dominance of Apple.
So what was the difference in the case of high definition DVD? Sony developed vital relationships with content providers (e.g., movie studios) and retailers. With support from key players such as Disney and Warner Brothers on the production side and Best Buy and Netflix on the distribution side, Sony created a competitive advantage Toshiba realized it could not overcome. The best products and best technologies are great to have if you can produce them, but if key channel partners do not buy in to your offering you have little chance of realizing your full potential in the marketplace. Sony now has both the product and channel support. Link