Earlier this month the CEO of Apple Steve Jobs said according to Gizmodo  ""Blu-ray is a bag of hurt.  I don't mean from the consumer point of view.  It's great to watch movies, but the licensing is so complex.  We're waiting until things settle down, and waiting until Blu-ray takes off before we burden our customers with the cost of licensing."

By then consumers will have moved onto storage based HD content downloaded from the Internet claim several analysts who track Apple.

Michael Greeson, President and Principal Analyst at TDG said "When it comes to Blu-ray, few know for certain of Apple's direction, I recall one such disclosure in 2007 when Apple said that they were already on board the Blu-ray train".

Since then a lot has changed he claims. He added "Since when is Apple concerned about burdening Mac users with excessive costs?  As loyal supporters will admit, there is no such thing as a "cheap" Mac (and if there was, it wouldn't be a Mac) and that hasn't stopped consumers from paying the higher prices which Apple commands of its products.  To label Blu-ray a "cost issue" is a misnomer, a distraction; in reality, it's about strategic positioning."

Explaining Apple's Blu-ray Predicament

Greeson went on to say "About a year ago I received a copy of an "insider's" document outlining how the various PC vendors were aligning in the high-definition DVD format war.  Apple, it seemed, had tossed its support behind Blu-ray and, I was informed, that Apple would have Blu-ray-enabled Macs (both desktop and notebook) on the market by mid-2008."

Of Blu ray sales he said "Despite the spin of fanboys and evangelists, Blu-ray player sales have been modest and both retailers and vendors face a tough balancing act moving forward.  Blu-ray was supposed to generate higher retail prices and improved margins, well above that of traditional DVD players.  However, this hope has been dashed by a combination of factors including (a) tough pricing battles with HD-DVD during the 2007 season that led to $200-$300 retail pricing levels years before Blu-ray supporters had hoped, and (b) consumer demand being pinched by mounting economic woes.  According to TDG's latest research done mid-October 2008 only 9% of adult broadband users "definitely would buy" a new Blu-ray player even if the price was $200.  Competition among Blu-ray retailers and manufacturing will be cutthroat and the winners are likely to be discount retailers such as Wal-Mart and Target selling the $200-$300 models, not high-end audio shops selling the $700-$900 Blu-ray models.  That's not the kind of demand Blu-ray was hoping to see this Xmas"

In part two of this story  We look at Blu ray and Apple TV as well as Apple's living room strategy going forward..