Sony has faced many obstacles in the introduction of its Blu-Ray technology into the market. At the same time, Sony was in the process of launching Blu-Ray one of its main competitors, Toshiba, launched a product called HD-DVD to directly compete with Sony’ s Blu-Ray DVD formats. Sony had a various delay in its product launch, while the HD-DVD was a smooth launch for Toshiba which enable the company to reach the market first and obtain the first big contracts from movie producers to utilize the HD-DVD technology in its new releases of DVD movies (Gardner, 2004).
This is the first of many issues and obstacles Sony has faced with its Blu-Ray product line. The manufacturing process for Blu-Ray caused some problems for the company since some of the key raw materials were not readily available. The supply of Blue-Ray laser diodes is limited; ironically one of two manufacturers in the world of this prime material needed to manufacture Blue-Ray diodes is Sony (Digg, 2007). Sony controls a large portion of the supply chain, thus in the long-term despite early setbacks they can create a barrier of entry for other companies attempting to enter the Blu-Ray market since they along with Nichia are only manufacturers of the diodes.
There are other problems associated with Blu-Ray technology. Major players in the computers industry such as Microsoft and its founder Bill Gates are claiming Blue-Ray technology has compatibility problems with Microsoft operating systems which are installed in over 80% of computers around the globe (Edwards & Burrows & Glover, 2005). There have been lots of problems, but the biggest so far is beyond anything Sony and its shareholders could have imagined.
A company called Target Technology filed a patent infringement lawsuit in 2007 against Sony claiming Blu-Ray technology violates a patent they hold for reflective layer materials in optical devices (Newratings, 2007).
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