Best and Worst Consumer Electronics, 2007

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Sling makes the curious Slingbox, a device that lets users watch their home cable TV channels and videos stored on a DVR from a laptop or mobile device on the road. It's expected that Sling, which has only vaguely quantified its customer base as "hundreds of thousands," will see its "place-shifting" technology added to future set-top boxes offered to EchoStar subscribers.

The video game market also produced a surprise winner in 2007. While Sony's PlayStation 3 console and Microsoft's Xbox 360 attracted all the prerelease hype in late 2006, both saw their unit sales come up behind Nintendo's Wii. More than 15 million Wii consoles had been sold this year through October, according to iSuppli. That beats the 10.4 million Xbox systems and the 8.8 million PS3 consoles sold in the same period.

DVD Stalls Out

While most segments produced clear victors in 2007, one battle for control of the home TV screen has yielded nothing but losers. With global sales of DVD players starting to fall as the market reaches saturation—consumers will have scooped up 126 million players in 2007, vs. 130 million in 2006, iSuppli reckons—the clash of next-generation DVD technologies ended in stalemate.

The Blu-ray disc camp, led by Sony (SNE), Samsung, and Panasonic (MC), traded minor victories with the HD DVD camp let by Toshiba (TOSBY). But neither side has the sort of momentum that would make consumers feel anything less than anxious about investing their money in a device that runs on what could become the losing format. As a result, they're showing little interest in either format. Combined, only 2.2 million Blu-ray and HD DVD players have been sold worldwide to date, says iSuppli. That amounts to less than 7% of the estimated 32 million HDTV sets in use. "By fighting each other, both sides are losing," iSuppli's Crotty says.

For now, awareness of the competing DVD formats remains relatively meager. A recent study by NPD found that 29% of those surveyed had heard of the HD DVD format, while only 20% had heard of Blu-ray discs. A strong holiday season for sales of HDTV sets combined with declining prices for both types of high-definition DVD players may help drive adoption, says Ross Rubin, an NPD analyst.

A price war is already under way. Toshiba's high-end HD DVD player is now listed at about $300, down from price tags of $500 and up (BusinessWeek.com, 6/23/06) earlier this year. And in recent weeks, retailers including Wal-Mart (WMT) and Best Buy (BBY) have featured a Toshiba HD DVD player on sale for $100. Meanwhile, the price on Sony's Blu-ray player has fallen to the $400 range, down from $500 to $600 earlier this year.

There has been one silver lining amid this standoff, for movie makers at least. Of those consumers who have purchased a next-generation DVD player, most plan to replace about a quarter of their existing movie DVD collections with next-generation discs.

Hesseldahl is a reporter for BusinessWeek.com .