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Toshiba Will Lose $200 For Every HD-DVD Player Sold |
Listed in: Xbox 360 Tags: Blu-ray, HD-A1 HD-DVD player, iSuppli, remote control, Toshiba
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When it comes to business, we don't know much. Okay, we know zilch except for one thing: you go into business to make money, not lose money. So can someone please explain why Toshiba is losing approximately $200 or more on every HD-A1 HD-DVD player it sells?That's what the published report from analyst firm iSuppli (not related to iPod or anything with "i" in front of it) said anyway. According to the report the components needed to assemble the HD-A1 came to approximately $674. This is higher than its estimated retail price of $499 set by the company. If you add the testing, cables, remote control and packaging, the cost goes up to more than $700.
Why the losing price? Probably to establish a toehold in the next-generation DVD market over the more expensive Blu-ray (about $999). This is where the pay-off could come. According to the Consumer Electronics Association, in the U.S. alone, estimated DVD player sales totaled about 16 million units in 2005, not counting PC sales and game consoles. iSuppli says:
"It's unusual to find this level of subsidization outside of the video-game console and mobile-phone markets. Presumably, Toshiba anticipates making back any initial HD-A1 losses with subsequent products. There is little question that Toshiba had to use a high-cost design for its first model. But there is a big question as to whether pricing its player so much less than Blu-ray is worth the financial risk."
iSuppli also forecasted that shipments of both HD-DVD and Blu-ray CE devices will rise to 65 million units in 2010, up from 1.6 million units in 2006. And who will win the Next-Gen Format War? The firm predicts both formats will win ground in the marketplace and it will be too close to call.
Via Yahoo!
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Comments
What does toshiba plan to make money on? The royalties for the format? They dont have that many great movies out anyway and for the ones that they do, people already own them on DVDs. So only people with HD-TVs that can show the quality of the higher resolution will buy them or maybe they dont see the need to.
I guess this is just to put in perspective what the HD-DVD add-on would cost.
200-300 probably.
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its not a game console, it's a VIDEO PLAYER you get VIDEOS
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They will both be in HD so they are both going to look great.
You go into a store and the HD player and discs are cheaper and they are pretty much the same quality (all the 1080i *****e Sony keeps bragging about doesnt make too much difference does it) so what are you going to buy???
I reckon they have dropped the price because of the PS3. They will sell more stand alone HD-DVD players than Blu-ray. By the time HD discs are mainstream the costs will have dropped and they wont be losing out anymore.
Its a promotion. You have to spend money to make money.
The price gives the advantage but PS3 is really the key to what format comes 1st. There isnt room for 2 formats.
If the PS3 isnt so strong its not going to take much for HD-DVD to take the lead.
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