My condolences go to Toshiba on the death of HD DVD. According to press reports the format was put on life support when Warner Brothers announced its backing for Blu Ray, and doctors have advised turning life support off, if the sales figures don’t rapid rise in the next few months – while Toshiba and other electronics vendors flog off their inventory of HD DVD players.

You could put it like that, because what we are witnessing here is a very rapid demise. (It took Betamax a lot longer to die). Following Warner Brothers decision, figures from NPD Group emerged, that a roughly 50-50 market split for high definition players had turned into a 90-10 split in Blu-ray’s favor in the first week of January. Stephen Baker, NPD’s vice president for industry analysis, was quoted as saying “One week is not a trend. It’s a data point.”

That was very kind of him, but some data points are difficult to ignore. The fact that the big damn at the top of the valley has collapsed is also “not a trend, but a data point”. Responding to the anomalous data point, Toshiba cut the price of its HD DVD player – but it’s clear (to me at least) that this is about clearing inventory to limit the damage.

Gartner was also very kind. It was quoted as saying “Gartner expects that, by the end of 2008, Blu-ray will be the winning format in the consumer market, and the war will be over.” The truth is that the war is already over (probability 100%) and now it’s simply a matter of dealing with the wounded and moving on.

Ribbit

Here’s a heads up on Ribbit, a company that has a telephony platform that combines mobile phones and the web. It has published its API and spawned a developer community around itself. What we have here is a competitor for Google’s Grand Central. Ribbit has been very innovative in its courting of external developers. As such it may get traction and compete strongly.

Notice that both Grand Central and Ribbit are small telco startups that never came out of the telco industry. Let’s face it. The Internet is eating the telco industry in a merciless manner. Ribbit is just another straw in the wind.

The iPhone to Underperform

It’s now emerging that Apple may have difficulty selling the 10 million iPhones that it thought it could sell by the end of 2008. There’s no mystery to this. Once you have satisfied the gadget lovers who don’t mind paying a regular monthly premium for using the iPhone, you run out of market.

I would have bought an iPhone myself if not for the usurious rental deals. It seems as though there’s a whole sub-market that exists of iPhones that have been cracked and are being used on networks in countries where the iPhone isn’t for sale yet. This is the most convincing explanation for the difference in the number of iPhones sold and the number connected through AT&T.

Another factor is that the iTouch has canibalised some of the iPhone market. If someone enables Skype on the iTouch then it will seriously damage the iPhone market model. Can Apple stop that happening? Does it want to?

It’s hard to say.