updated 12/7/2004 11:13:59 AM ET 2004-12-07T16:13:59

Japan's Toshiba Corp. and Memory-Tech Corp. said Tuesday they have developed the world's first DVD that can be played on both standard and high-definition DVD players, amid a heated global race to come up with the benchmark for new optical disks.

The discs rely on the HD-DVD format, one of two technologies competing to become the world standard for the next generation of high-definition DVDs, which are expected to offer sharper images, the companies, both based in Tokyo, said in joint statement.

HD-DVD has the backing of the DVD Forum, an international association of electronics makers and movie studios, and new DVD players using the format are expected to hit stores by late 2005.

Its competitor, Blu-Ray — backed by Sony Corp., its Hollywood studio and News Corp.'s Fox Entertainment Group Inc. — has more digital programming storage space. But HD-DVD is expected to be cheaper to make because it uses technology closely resembling that used in current DVDs.

It's still unclear which will become the dominant technology.

Tuesday's announcement raises hopes for a way to smooth the transition from the old DVD format to new disc technology, and as more people trade in their old TV sets for newer, higher resolution screens.

Toshiba and Memory-Tech said their disc has a dual-layered surface, which separately stores high-definition and lower resolution data on the same side.

For consumers, that would eliminate the potential headache of having to own two types of DVD players: Old and new DVD players will be able to read all types of HD-DVD discs, though only the newer equipment can take advantage of the higher resolution technology.

The discs, which took six months to develop, will have a memory capacity of 19.7 gigabytes, with 4.7 GB of regular DVD space and 15 GB of high-resolution space, Memory-Tech spokesman Masato Otsuka said.

It's the first market-ready model of a HD-DVD, Toshiba spokeswoman Junko Furuta said. The discs are expected to be ready in late 2005, when Toshiba plans to begin selling an HD-DVD player, recorder, and laptop computer with a built-in HD-DVD disc drive.

Making the discs won't cost any more than the companies now spend on producing current DVDs, Memory-Tech's Otsuka said.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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