In a bid to cut costs for local electronics makers, Chinese researchers plan to develop a version of the next-generation HD-DVD optical disc format specifically for China, according to a researcher involved with the project.

The DVD Forum, which oversees the development of HD-DVD as a next-generation DVD format, gave its approval last week for a feasibility study to be conducted on the proposed China-only HD-DVD standard. The specification will include support for a locally developed video compression technology, called AVS (Audio Video Coding Standard)

Development of the Chinese HD-DVD format could be finished by the end of next year at the earliest, with the first commercial products likely to hit the Chinese market in 2007, said Lu Da, deputy director of the Optical Memory National Engineering Research Center at Tsinghua University, in Beijing.

By comparison, the first HD-DVD products that support the main HD-DVD specification are expected to hit the market before the end of this year.

The China-only version of HD-DVD will be largely similar to the standard international version of HD-DVD, with a few modifications, including support for the AVS video compression technology, Lu said. "That is the principal difference," he said, noting that many features of the format, such as the disc capacity, will remain the same.

In addition to AVS support, the China-only version of HD-DVD will include support for Mpeg2, Mpeg4 and Microsoft's WMV9 (Windows Media Video 9.0), Lu said. Chinese electronics manufacturers will be able to choose which of these formats they want to support. If they choose not to support all of the formats, they will be able to reduce the cost of producing HD-DVD players by lowering their licensing costs, he said.

The AVS video-compression technology is being developed in China as a cheaper alternative to video compression technologies developed oversees, which some Chinese electronics manufacturers have said are too expensive for them to license. The AVS Workgroup of China, the group promoting the standard, has previously said that adoption of AVS by Chinese manufacturers could save them $1bn (about £550m) in licensing fees over the next 10 years.

In addition, Chinese content producers are expected to adopt the AVS video compression technology, Lu said. Adding support for the technology to HD-DVD will support these plans, he added.

Many details of the China-only HD-DVD standard remain to be ironed out, including which types of discs will be offered under the format, Lu said. One possibility is that a ROM version for pre-recorded content and an R version for users who want to record and store content will be made available, he said.