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Wal-Mart denies cheap HD DVD deal

Scheme simply hadn't got that far?

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Wal-Mart has denied it is working with a Chinese manufacturer to build millions of budget HD DVD players, a move that could prove decisive in the battle with rival next-gen optical disc format Blu-ray Disc.

A Wal-Mart spokeswoman yesterday claimed that a Chinese-language report indicating the retail giant had ordered $300m worth of HD DVD players - 2m in all - from a certain Fukuhiko Electronic - aka Fuh Yuan - was "untrue", according to a PC Magazine story.

The original report also mentioned Chinese company China Great Wall which would, apparently, manufacture the players designed by Fukuhiko/Fuh Yuan. Interestingly, Fukuhiko/Fuh Yuan reportedly put up a statement on its website to the effect that it had indeed won business from Wal-Mart, though when we checked today, the company's server was not responding.

Did the company tell the local press something it should have kept confidential? That's possible. The original Chinese-language story certainly appeared to be sourced through Fukuhiko/Fuh Yuan, and it's hard to imagine it posting a similar claim on its own website if it was indeed "untrue".

Curiously, Wal-Mart's spokeswoman refused to comment on the statement on the Fukuhiko/Fuh Yuan website, saying she could not discuss the retailer's business dealings with suppliers. If Fukuhiko/Fuh Yuan is not a supplier, why not comment?

Because it was - potentially. Fukuhiko/Fuh Yuan later posted a retraction on its website, stating it had not received an order from Wal-Mart but instead had been asked to provide a costing and production schedule for HD DVD players.

In short, it was bidding for Wal-Mart's business, which it had not yet won. Either way, Wal-Mart appears interesting in acquiring a heap of cheap HD DVD players, and even if Fukuhiko/Fuh Yuan fails to win the manufacturing contract, some other Asian manufacturer will.

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