For Those Waiting for a Cheaper PS3/BD/HD DVD Player...

One of the main components for these devices is dropping significantly in cost:
http://www.sony.net/SonyInfo/News/Press/200704/07-037E/index.html

Code:

Blue-violet laser diode for BD recorder
"SLD3234VF" (output 170mW, φ5.6mm)      Apr, 2007  4,500 Yen 
"SLD3234VFI" (output 170mW, φ3.8mm)                5,000 Yen

Blue-violet laser diode for BD player
"SLD3131VF" (output 20mW, φ5.6mm)       Jun, 2007  900 Yen 
"SLD3131VFI" (output 20mW, φ3.8mm)                 1,000 Yen

Blue-violet laser diode for BD recorder
"SLD3235VF" (output 240mW, φ5.6mm)      Nov, 2007  4,500 Yen 
"SLD3235VFI" (output 240mW, φ3.8mm)                5,000 Yen

So by June, these diodes would cost ~$8. That seems to be around the time a few new players hit the market. Some $500-$600 MSRP Blu-ray players for the summer were mentioned in a thread recently I believe, and there has been talk of some HD DVD players retailing for $200-$300 (or even less) by the end of the year (some go for ~$300 right now actually). For those interested in one of the above devices, but you're holding out for something a little less pricy, this does seem like encouraging news.

FWIW, this is more of "the more you know" thread than a thread with any sort of immediate benefit to consumers (unless you're in the market for some blue laser diodes). I doubt this will even be on the main sites that cover this news, but I think is something interesting to keep an eye on, especially since it does complement a number of reports regarding price cuts on these devices (could there be $200-$300 HD DVD/Blu-ray players by the end of the year?).

 

I wasn't really trying to focus on a possible PS3 price drop, due to some of the same reasons already mentioned. I mostly wanted to focus on price drops for Blu-ray and HD DVD players (see lack of PS3 mention in OP), although I went ahead and added the PS3 since it is related and it would probably be brought up anyway.

Microsoft seems to be waiting for Sony, so I guess we'll see no price cuts for years. Probably some prices increases actually (see Elite and 80GB PS3 + discontinuation of 20GB PS3).

I think that is what Sony wants to do, but I don't know if they have that luxury. Selling <100K in the US and <40K in Japan per month would certainly make them heavily consider a price cut, even if MS has no intentions of doing so (although they would of course follow Sony's lead if necessary).

That's what a diode for a BD recorder costs approximately. Ideally, a diode for just a BD player would cost between that and ~$8 I'd assume, although I suppose they could be using an older, less refined method that could be (considerably?) more expensive.

In this case, I'd assume they could do more than just a $40 price drop, assuming they were basing a drop on reduced costs of Blu-ray components. This might have been lost due to the way I worded it in the OP, but this wasn't a drop that occurred overnight. Costs for these diodes have been dropping gradually for 6-12 months, so I'd assume that diodes that went into the PS3 6+ months ago probably cost more than just $40.

I'm not even sure if that is actually the correct way of looking at this. The way I understand things, there was a severe lack of diodes 6+ months ago, with only Sony and a few other companies supplying them (and Sony couldn't supply any devices other than their own). While the costs were high for these diodes already, these companies did have an interesting situation on their hands due to the scarcity. For example, Sony could keep a diode and put it in a PS3 (say at a cost of $60), or they could sell that diode for price marked up considerably due to the lack of supply. Since then, a number of other companies have joined in on the production of diodes, and yields have improved, meaning that there is no longer a lack of diodes and more reasonable prices for these diodes. This is more of a FYI thing since I don't know exactly how it would affect anything cost-related to the PS3 (if anything, perhaps I overestimated the costs of the Blu-ray components).

And back to the statement, I'd also assume that if Sony was considering a price cut at this time, they would be able to "offset" it with more than just the reduced costs to make blue laser diodes.

Agreed. Although as I stated in my reply to Invisible Fan, Sony may not find themselves in a situation where they have a "choice." It would certainly be possible that a drop in price could result in an increase in profits (more game sales, more Blu-ray movie sales, more PSN purchases, more accessories, etc.). Right now, over half of the systems they've made (at a loss) are sitting on store shelves, getting them nothing. Of course, even the PS3s in consumer hands aren't really getting them much (see software sales), although I suppose it helped Blu-ray movie sales a little bit.

A price cut by the end of the year seems likely, especially if the 360 gets one. I suppose they might rather push retailers to offer special deals though, like Microsoft did last year. Both might want to wait until Spring 2008 though (especially if MS can't get 65nm CPUs until then).

 

I missed this article when it was originally posted, but there actually is an article about this news regarding cheaper diodes and a possible PS3 price cut. It includes some quotes from analyst Michael Pachter and some other info (kind of similar to what was already said):
http://biz.gamedaily.com/industry/feature/?id=15931

I wonder if he was implying that the lowering prices of Blu-ray components would lead to a $100 drop in costs, or if that, along with other things (removal of EE, 2000 fewer components, 65nm production for some chips, etc.), would help Sony shave off $100 in costs.