Vudu drops its price to compete with Apple TV

High-definition on-demand service Vudu has announced it is slashing its price for its console by 25 percent, perhaps in response to Apple TV's having replenished its own value proposition.

In the short few months it has been available, Vudu has tried numerous offers in an effort to eke out a measurable stake in the video on-demand market: First, it offered $50 of free movies with purchase, then it announced a tie-in with Sharp's Aquos HDTV line. Now, it's taking a cue from HD DVD by instituting a severe price drop.

By pulling the unit down to a $295 price point and offering $100 movie credit to those who purchased it within the last 30 days, Vudu is now on par price-wise with competing service Apple TV, which retails for $229 for its 40 GB model.

Many are predicting that the high-def disc format war will end when streaming HD becomes affordable enough to be adopted by the majority. A price war between Vudu and Apple TV may be the first step away from the seemingly interminable Blu-ray vs. HD DVD fight.