View Full Version : Toshiba taking $200 loss on each HD-A1
Tejstar
26-06-2006, 3:19 PM
Apparently, Toshiba are taking a loss on each HD-A1 sold, to try and buy market share away from Blu-ray:
Toshiba is subsidising its HD-A1 HD DVD player by at least $175 in a bid to buy the next-generation optical disc format success. So claims market watcher iSuppli, which took the machine to bits and totted up the cost of all the parts.
Available in the US, the HD-A1 is priced at $499. iSuppli's assessment of the cost of the players' components puts the product's bill of materials at $674 - and that's before the cost of assembly, packaging, peripherals, distribution, advertising, software development and so on. Oh, and that $499 is the retail price - Toshiba will be charging resellers even less for the player.
The market watcher said it expects the full cost of the HD-A1 to come in at over $700 a unit - over 40 per cent more than the consumers pays for it. ISuppli characterised this level of vendor subsidy as "unusual".
So why is Toshiba going to far, especially when rival Blu-ray Disc players cost around twice as much as the HD-A1? You can answer that question with just three letters, we'd say: PS3. The next-generation games console launches in November for $499 - or $599 if you want an HDMI port, Wi-Fi and an bigger hard disk. Sony's recent move to delay its own consumer Blu-ray Disc player to later October suggests it really wants folk to buy its games console, even if they only use it as a next-generation DVD player.
Either way, the PS3 is likely to define the price point for consumer Blu-ray and HD DVD devices in the coming Holiday season, and Toshiba clearly wants to make the point that HD DVD was there first. The PS3, like all other games consoles, costs much more to make than to buy - the vendors make up the difference on the back of software sales. That's the market environment Toshiba has to work in if it's to compete was the PS3, so perhaps the high HD-A1 subsidy isn't that odd, after all.
The HD-A1 shipped in the US in April. Soon after, early adopters took the machine apart only to find an Intel Pentium 4 running the show. The iSuppli analysis reveals there's a Broadcom HD codec in there too and a set of four Analog Devices DSPs. The box contains 1GB of Hynix DRAM, a 256MB Flash disk from M-System and 32MB of Flash memory sold by Spansion.
Click here (http://www.engadget.com/2006/06/23/toshiba-taking-200-loss-on-each-hd-a1-sez-isuppli/).
Apparently, Toshiba are taking a loss on each HD-A1 sold, to try and buy market share away from Blu-ray:
Toshiba is subsidising its HD-A1 HD DVD player by at least $175 in a bid to buy the next-generation optical disc format success. So claims market watcher iSuppli, which took the machine to bits and totted up the cost of all the parts.
Available in the US, the HD-A1 is priced at $499. iSuppli's assessment of the cost of the players' components puts the product's bill of materials at $674 - and that's before the cost of assembly, packaging, peripherals, distribution, advertising, software development and so on. Oh, and that $499 is the retail price - Toshiba will be charging resellers even less for the player.
The market watcher said it expects the full cost of the HD-A1 to come in at over $700 a unit - over 40 per cent more than the consumers pays for it. ISuppli characterised this level of vendor subsidy as "unusual".
So why is Toshiba going to far, especially when rival Blu-ray Disc players cost around twice as much as the HD-A1? You can answer that question with just three letters, we'd say: PS3. The next-generation games console launches in November for $499 - or $599 if you want an HDMI port, Wi-Fi and an bigger hard disk. Sony's recent move to delay its own consumer Blu-ray Disc player to later October suggests it really wants folk to buy its games console, even if they only use it as a next-generation DVD player.
Either way, the PS3 is likely to define the price point for consumer Blu-ray and HD DVD devices in the coming Holiday season, and Toshiba clearly wants to make the point that HD DVD was there first. The PS3, like all other games consoles, costs much more to make than to buy - the vendors make up the difference on the back of software sales. That's the market environment Toshiba has to work in if it's to compete was the PS3, so perhaps the high HD-A1 subsidy isn't that odd, after all.
The HD-A1 shipped in the US in April. Soon after, early adopters took the machine apart only to find an Intel Pentium 4 running the show. The iSuppli analysis reveals there's a Broadcom HD codec in there too and a set of four Analog Devices DSPs. The box contains 1GB of Hynix DRAM, a 256MB Flash disk from M-System and 32MB of Flash memory sold by Spansion.
Click here (http://www.engadget.com/2006/06/23/toshiba-taking-200-loss-on-each-hd-a1-sez-isuppli/).
Great a bargin at last !
AVI
And just how much do you think Sony will lose on each PS3 they sell ? It is a strange game these manufacturers play. This is gambling with extremely high stakes.
Sony can bargain on strong software sales (games and BR discs) for 5 years, with another 5 years of lower sales when the PS3 becomes Sonys budget model.
The 360 will have a HD-DVD drive, but how many current owners will splash out for this extra?
Sony can bargain on strong software sales (games and BR discs) for 5 years, with another 5 years of lower sales when the PS3 becomes Sonys budget model.
The 360 will have a HD-DVD drive, but how many current owners will splash out for this extra?
What are the projections on the first year of PS3 console sales ?
AVI
I don't know.
They'll sell as many as they can make, which will be in the millions.
How many BR/HD-DVD players will be sold in the next 12 months, a couple hundred thousand?
I don't know.
They'll sell as many as they can make, which will be in the millions.
I've read esimates that it cost Sony around $1000 per PS3 so if they sell 3,000,000 day one as projected that's a lose of over $1b :eek: And that assumes it works !
AVI
pezley
27-06-2006, 7:56 AM
Sony are not losing anything on hardware. They have stated that the days of losing money are long gone and it is a nintendo way of business.( which is a false statement right away as they make profits on all hardware )
this was from one of kuturagi's speeches....mind you that guy is a complete tool
Sony are not losing anything on hardware. They have stated that the days of losing money are long gone and it is a nintendo way of business.( which is a false statement right away as they make profits on all hardware )
this was from one of kuturagi's speeches....mind you that guy is a complete tool
Sony said that ? Well it must be true then :eek:
Is that the same Sony that said it will launch a BD player in June, oh Sorry July, I mean Sep, Sorry Oct..... :devil:
AVI
Uruloke
27-06-2006, 8:26 AM
Sony are not losing anything on hardware. They have stated that the days of losing money are long gone and it is a nintendo way of business.( which is a false statement right away as they make profits on all hardware )
State your source please. It's a well known fact that all console manufacturers make a loss on their machines, but make the money back (and more) on the software.
Tejstar
27-06-2006, 1:36 PM
Well I met Phil Harrison at the beginning of May (there's a thread about it in the PS3 forum) and he told me that they will be making a loss. It's well known that they make their money from software and this time round, through their internet offering.
Wasabi
27-06-2006, 2:48 PM
The interesting part of the article is that Toshiba's player is also selling slowly.
http://www.cdfreaks.com/news/13599
Samsung Blu-ray player makes slow start, Sony delays again
Posted by Seán Byrne on 27 June 2006 - 00:31 - Source: Computing News
As pretty much expected Samsung's launch of the BD-P1000 Blu-ray disc player on Saturday went off to a slow start with players struggling to leave the shelves. Worse still, the Hollywood news website MovieWeb reported about plenty of confusion if anything amongst the consumers. This would most likely be the case for consumers who saw the players for the first time and have no idea what's the difference between Blu-ray and HD DVD. At present, the player is selling for a hefty US$999, with a choice of seven Blu-ray titles to choose from. The player is expected to hit the retail stores in the UK in September.
If consumers were depending on Sony to launch the first Blu-ray disc players, they would find themselves waiting another while again with Sony now pushing back its Blu-ray launch yet again, this time to around October 25th according to Sony Style's website. It was just a few weeks ago that they delayed the launch to August 15th from July. According to a Sony spokesperson, the launch has been reportedly delayed as a result of software-related issues and not HDMI as some have thought, especially with the finalisation of the HDMI 1.3 interface standard.
Samsung's high-definition Blu-ray DVD player finally went on sale in US shops on Saturday, but early reports suggest that the players are not flying off the shelves.
Hollywood news website MovieWeb reported that Samsung's BD-P1000 DVD player, which hit the shops five days after the first seven Blu-ray films on 20 June, aroused "little sales activity" but "plenty of confusion" among consumers.
Samsung may find comfort in the news that Toshiba's rival HD-DVD player is also said to be selling slowly.
Quote from Tom's Hardware about new Sony delay:
Without any announcements or warnings in advance, the release date posted on the Sony Style Web site for its upcoming BDP-S1 Blu-ray Disc player was updated last Wednesday to read, "On or about October 25, 2006." The previous date had read August 15, after having been delayed from a late July date just two weeks ago.
With even poor sales being reported for the much cheaper Toshiba HD DVD player, it looks like this battle will go on for a good while yet before it starts to become clear which side starts leading. The slow start may also be a had sign as we could end up seeing something like what happened with Super Audio CD and DVD-Audio, the two high definition audio formats that have aimed to take over the Audio CD.
Packetfront
27-06-2006, 3:16 PM
How can they know as Toshiba won't disclose the sales figures to anyone and according to AVS forum the Toshiba is selling like butter, you can't even find anyone almost with stock of HD-A1 and XA1 getting harder to get also.
Tejstar
27-06-2006, 3:47 PM
I think the article said it all really, the mainstream consumer is very confused about all this new tech. And competing formats does not make life easier…
Packetfront
27-06-2006, 4:21 PM
I think the article said it all really, the mainstream consumer is very confused about all this new tech. And competing formats does not make life easier…
That's why J6P still enjoy their 20" color TV with VHS player, maybe a cheap DVD player for £30 to Christmas would be nirvana for the family.
Just walk into a average J6P home and look what they got, they can't even afford a good sofa, normal people have other priorities in life than to choose between BD and HD-DVD.
Many people don't even got a DVD player today and still think it would be a luxury to own one.