Toshiba is subsidising its HD-A1 HD DVD player by at least $175 in a bid to buy the next-generation optical disc format success. So claims market watcher iSuppli, which took the machine to bits and totted up the cost of all the parts.

There has been speculation since the pricing was announced, and I’ve believed all along, that Toshiba was selling the players at a loss in an attempt to buy market share. After HD-DVD lost their planned six-plus-month lead over Blu-ray when they were both delayed, also missing last year’s holiday season, followed by defections from Warner and Paramount as they announced BD support – Toshiba needed to do something to have *any* prayer. They’re gambling that they can buy market share with the loss today, and make it up over time licensing HD-DVD if it survives. If it fails (and I think it will) then the lose all future licensing revenue. So it is big stakes gambling for them.

But check out what’s inside:

The HD-A1 shipped in the US in April. Soon after, early adopters took the machine apart only to find an Intel Pentium 4 running the show. The iSuppli analysis reveals there’s a Broadcom HD codec in there too and a set of four Analog Devices DSPs. The box contains 1GB of Hynix DRAM, a 256MB Flash disk from M-System and 32MB of Flash memory sold by Spansion.

The HDMI HD equipment interconnect standard has been updated, the seven companies behind the technology announced today. One of them, Sony, said its PlayStation 3 will support the new version of the interface.

Toshiba will next month ship the world’s first consumer-oriented HD DVD player capable of writing to next-generation recordable media, the Japanese giant said today. The unit also features a whopping terabyte of hard disk storage – sufficient for 130 hours’ HD content, the company said.

OK, this makes the earlier post about Toshiba’s new player, and price, less painful. It is a 1TB DVR with HD-DVD recorder, not just an HD-DVD recorder.