Sony teams up with NEC

Sony and NEC announced today they will set up a joint venture for optical disk drives. According to Reuters: "Sony and NEC will transfer their optical drive businesses to a new entity due to start operations on April 1. Sony will hold a 55 percent stake in the venture, which will design and make DVD and CD drives for personal computers and other products". The market is growing quite strongly, as a NEC spokesman said, and the competition is tough while the prices are falling. But gaining a larger market share might not be the only purpose of this partnership. This could also bring more support to the upcoming blu-ray DVD format developed by the Blu-ray Disk Group which is said to launch soon. Sony, amongst other 16 companies like Hitachi and LG, is on the Group's board of directors and is one of the leading companies who supported this new format. The other competing format, HD DVD, promoted by Toshiba, Microsoft and Intel and also by major movie studios enjoys more popularity from companies eager to get a piece of the multibillion dollar market, by adding support for this new format in their software applications. So, as PC manufacturer no. 2 in the world, Hewlett Packard hasn't yet decided which of these two formats to support, the newly formed partnership between Sony and NEC could be a boost in the blu-ray DVD's future.