'Teardown' finds Sony taking a bath on each PS3

[PeteS in CA]

'Teardown' finds Sony taking a bath on each PS3
Dylan McGrath
EE Times
(11/16/2006 1:16 PM EST)

SAN FRANCISCO - Sony is taking a considerable loss of more than $240 per unit on each PlayStation 3 video gaming console, according to a "teardown" analysis conducted by market research firm iSuppli Corp.

The combined materials and manufacturing cost of the PS3 is $806 for the model equipped with a 20-Gbyte hard disk drive (HDD) and $840 for the higher end 60-Gbyte HDD version, according to a preliminary estimate of expenses by iSuppli's teardown analysis service. This total doesn't include additional costs for elements including the controller, cables and packaging, the firm
said.

Sony is offering the PS3s-scheduled to hit U.S. retail stores just after midnight Friday (Nov. 18) -at suggested retail prices of $499 for the 20-Gbyte model and $599 for the 60-Byte model. According to iSuppli's analysis, Sony is taking a loss of roughly $241 on the lower-end model and $307 on the higher end model.

I think the losses for the low-end and high-end machines are switched.

[linuxguru]

Re: 'Teardown' finds Sony taking a bath on each PS3

Yup. Moreover, iSuppli tends to overestimate the BoM. Sony is an old pro at the consumer electronics game, and has fairly lean supply chains. Besides, it never actually bought into this idea of selling hardware at a loss - only M$ did so for the XBox.

Sony may be making some small losses initially, but their costs will be amortized if volume builds up.

[willawake]

Re: 'Teardown' finds Sony taking a bath on each PS3

each kid will want like what $600 of games and accessories?
maybe they will sell more big TVs as well