Research firm Gartner says HD DVD development will cease in under two weeks, following Toshiba's announcement that it is reviewing its next-generation DVD strategy.
"Gartner anticipates Toshiba will finish with HD-DVD within the next couple of weeks," said Gartner principal research analyst Paul O'Donovan. "Its share price has risen on the basis that the rumours are strong that it will pull out sooner rather than later. If it delays then the stock will drop very quickly."
Japanese public broadcaster NHK reported at the weekend that Toshiba had halted production of HD DVD players and recorders and is close to making a decision on whether to throw in the towel on the Blu-ray competitors.
The decision, which NHK said will likely cost the company several tens of billions of yen (hundreds of millions of pounds), is being made in the face of flagging support by movie studios and major US retailers.
"The recent price declines on Toshiba HD DVD players were more to do with reducing stock levels of the players than trying to win market share or spoil sales of Blu-ray players," added O'Donovan. "On that basis, Toshiba may well announce its withdrawal of HD-DVD very soon.
"Will this cause an acceleration of sales of Blu-ray? Probably not," he said. "The sales of Blu-ray are linked to HD flat-panel TVs first and foremost. Certainly those consumers who have bought a HDTV may now consider buying a Blu-ray player but it will depend on various factors such as do they have enough money to buy now or will they wait and maybe they will consider a Sony PS3 instead of a Blu-ray DVD player? For sure, there will be a small rise but not an acceleration yet. That will come towards the end of the year."