(The Hollywood Reporter) — In what observers consider an unlikely alliance, Sony Corp. and NEC Electronics Corp. have agreed to establish a joint venture that will plan, design, manufacture and market DVD and CD drives.
The two companies are bitter rivals in the battle for a next-generation, high-definition optical disc standard.
Sony is the primary developer of the Blu-ray Disc, which is supported by five of the six major studios as well as the majority of consumer electronics manufacturers and computer firms.
NEC, with Toshiba, is behind the competing HD-DVD format, which is based on existing DVD architecture and would likely be cheaper and easier to produce than Blu-ray Disc, which boasts greater capacity.
The joint venture, 55% controlled by Sony, will take over the existing optical disc drive businesses of the two companies. The startup date is April 1. The joint venture would create the second-biggest optical disc drive maker in the world.
Rumors that the creation of the joint venture means NEC will switch allegiance from HD-DVD to Blu-ray Disc prompted Toshiba to issue a statement that this is not true.
“NEC has informed Toshiba that it will continue to support HD-DVD and that its position on the next-generation DVD format remains unchanged,” according to the statement. “We do not expect this announcement to have any impact on HD-DVD standardization or market penetration.”