Everyone knows that it has to do with the color of the lazer. Blue being a shorter wavelength can have more data per area than a red lazer.
What I'm amazed that nobody is talking about is the fact that Blue-Ray can hold twice as much data as the other disk. Not right now, but in the next generation. I believe that is the criteria that swayed Appple to support it.
Both can hold a full length HD movie, but what if your data isn't a full length movie? Then Blue-Ray is superior. It's cheaper per GB of storage ... by far.
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