DVD Rivals jump into bed

Nov 21, 2005: In surprising move after months of escalating DVD format skirmishes, Sony and NEC have signed a memorandum of understanding to create a new company to design and produce optical drives.

The two giants will be forming a new company that will produce drives incorperating each companies' strengths: Sony's optical pickups and NEC's system chips. The venture will be 55% Sony and 45% NEC owned and will produce DVD drives and CD drives for use in personal computers and electronics devices from April 1, 2006.

The deal brings the battle for the next generation of DVD back into the spotlight again as Blu-Ray is a Sony invention, while HD DVD has been developed by NEC and Toshiba.

Yoshibumi Yashiro, spokesman for NEC says the joint venture would design and make DVD drives that could be used with both the Blue-ray Disc and HD DVD formats "for the time being."

The deal does not appear to have slowed the format rivalry as yet, as both companies plan to conitnue promoting their formats, preffering to let the market decide the victor.

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