The players will be introduced in Japan, the U.S. and Australia beginning in December as Toshiba targets holiday sales. The basic model, HD-XF2, will sell of about $425 while the high-end HD-XA2 will sell for about $950. The pricier model will for the first time display 1,080-line progressive video.

Toshiba originally planned to introduce second- generation players in the U.S. around October but delayed shipments until early December. "Some components supply was not enough, which caused the delay," said Fujii, adding that the delays are unrelated to blue laser diode production problems which have slowed introduction Sony's Playstation 3.

By the end of 2006, Toshiba expects about 170 HD DVD titles will be released in the U.S., 70 in Japan, 40 in Europe and 20 in Australia. "We expect that the sales of HD DVD products by March will reach the initially planned 600,000 units," said Fujii.

Toshiba predicts the HD DVD market will grow to nearly 4 million units by next year and over 8 million by 2008. "In 2008, 20 million PCs will have HD DVD drives," Fujii predicted, adding that PC drives will surpass HD DVD players by 2008.