Toshiba has conceded that their HD DVD format is "behind the eight ball," according to ITWire. Despite that, Toshiba has declared that the the war is "just beginning."

In spite of a slow start, Toshiba's Australian general manager Mark Whittard said that he expects to catch up with Blu-ray player sales in Australia by Christmas. He cited market share numbers in Europe and America, omitted PS3 sales, and said that HD DVD has 55 percent in the U.S. and 73 percent in Europe.

"All that press about Blockbuster and Blu-ray hasn't made any difference to HD DVD sales," Whittard said. "This is going to be a very interesting next couple of years but HD DVD has a very strong future."

Referring to the delay in getting units into place in Australia, Mr. Whittard said, "The delay has cost us, I would openly admit that we're a little behind the eight ball. There's been a lot of talk in the press about Blu-ray and that the war is over but I can tell you it's not, it's only just beginning."

The HD DVD camp has been using lower priced players to generate market share. However, Mr. Bill Hunt, Editor of The Digital Bits, has disputed Toshiba's optimistic statements. Mr. Hunt recently pointed out the flaw in Toshiba's business model. Drastically reduced prices, and correspondingly razor thin profit margins, make it unlikely that any other manufacturer will also join in on the format. He also has claimed that Toshiba is losing money on the players and will lose even more as the prices are slashed.

Toshiba may believe that the war is "just beginning," but increasingly slashed prices and financial loses for a product are always bad signs.