Fierce competition is heating up between data storage technologies Blu-ray and high-definition DVD to become the next de facto standard format for DVDs.

"The winner of this conflict could go on to become the biggest data storage medium in the market, and early signs in the industry forecast a slight tilt in favour of Blu-ray," said Frost & Sullivan research analyst Rajesh Kannan.

The analyst firm expects Blu-ray to edge ahead as the preferred choice for optical archival storage. Although this is good news for Blu-ray proponents, being positioned as the next-generation optical storage format leaves the technology open to intense competition.

Newer technologies touting better capabilities are likely to emerge, Frost & Sullivan noted, pointing to several data storage devices intended for large capacity archival system applications already under development.

These include holographic optical discs, 3-D fluorescent multi-layer optical media, and near-field optical recording, among others.

"Although these technologies are still in the embryonic stages of development, Blu-ray needs to establish itself quickly in the mass market before the feasibility of a more advanced technology is proven," said Kannan.

Storage capacity is an area where Blu-ray faces the danger of losing out to competing technologies. This is specifically pertinent for large-scale corporate storage applications where Blu-ray's 50GB capacity is considered insufficient.

Even assuming the existence of laser diodes operating at 200 nanometre to increase the storage capacity, the difficulty in obtaining low-cost optics limits progress on this front, according to Kannan.

Moreover, a variety of alternatives offering better storage capabilities place the bargaining power in the hands of the Blu-ray consumers.

Prices remain extremely high, creating further doubts regarding Blu-ray's acceptance in the mass market. Sony Corporation's Blu-ray DVD recorder released in early 2004 was priced at $4,000, and Matsushita's follow-up was also considerably expensive at $2,780.

Since existing generic alternatives start at $100, Blu-ray needs to lower the cost of production to enable mass market uptake.

"Despite the competition and technical challenges, Blu-ray has been fortunate enough to gain support from industry heavyweights in the field of films and personal computers, placing it in the top slot as the next-generation DVD format," Frost & Sullivan stated.

"For example, Blu-ray is banking on support from Dell and HP to become the next PC DVD format. Meanwhile, Sony's acquisition of MGM studios is playing a crucial role in endorsing the Blu-ray format throughout Hollywood."