Friday, June 30, 2006
Toshiba Losing Money on First HD DVD Players
Posted by Suhit Gupta in "NEWS" @ 10:00 AM
"The first generation of HD DVD players are priced 50% below their Blu-ray rivals. While it is no secret that the HD DVD camp is using a lower price to make up for feature disadvantages, a market research firm today reported that Toshiba in fact is taking a loss: The actual cost of the device may be 40% higher than the retail price. Bringing a product to market below actual cost has been a common sight in the game console industry for several years: Sales of games support the sales of consoles, which are initially priced substantially below production cost: Over time the cost of individual components of the console eventually drops and revenues catch up with production cost, resulting in gradually increasing profits. Toshiba apparently hopes that a similar concept may work for its HD DVD player in the battle against competing Blu-ray devices, according to Isuppli."
I am surprised that the difference is as high as 40%. The first generation of HD DVD players are priced at $500 and $800, while Blu-ray players are selling for at least $1000. This is a very interesting format war, something that has been brewing through hype alone for a couple of years now and it will be very interesting to see how it plays out over the next six months or so.
I am surprised that the difference is as high as 40%. The first generation of HD DVD players are priced at $500 and $800, while Blu-ray players are selling for at least $1000. This is a very interesting format war, something that has been brewing through hype alone for a couple of years now and it will be very interesting to see how it plays out over the next six months or so.
