NEW YORK, USA: The adoption of high definition (HD) optical drives by PC manufacturers and consumers is only just beginning. Nonetheless, both Sony (with its Blu-ray format) and Toshiba (HD DVD format) announced their intentions to include high definition DVD drives in all their machines.

With consumers confused about which format to buy and a relative paucity of drives available to computer manufacturers, how rapidly will HD optical drives enter the PC market?

"ABI Research expects high-definition drives to bring in revenues of about $2 billion by 2012," says principal analyst Steve Wilson. "Of that, about two-thirds will be accounted for by universal drives, which can play either format. Few universal drives are sold today, partly because of their higher price. But those prices will fall to about the same as Blu-ray players by 2009, and we forecast universal player sales to exceed Blu-ray the following year."

The amount of data that must be processed for smooth presentation of high-definition video on the computer far exceeds that of a standard DVD, so extra graphics processing power is needed. At its most recent Developers Forum, Intel recommended the use of dedicated HD accelerator chips made by Broadcom.

However, says Wilson: "As with most new functions that originally require discrete processors, high-definition video processing will gradually be integrated with existing graphics chipsets, negating the need for a separate accelerator. Both Intel and AMD have integrated HD support in their roadmaps for 2008. So the market opportunity for standalone HD processors will be limited (as little as $25 million) and short-lived."

ABI Research's data shows that about 30 percent of consumers use DVDs for data storage. However the adequate 4 GB/disk capacity of conventional DVD-Rs and the steep cost per gigabyte of high-definition disks will limit consumer demand for HD as a storage medium.