As big site like Cnet already reported that Microsoft is planning to cut the prices of the Xbox, Digitimes reports that contract prices for DVD drive manufactures may also drop by 30%.
It seems that the DVD drive (bought by Microsoft for almost 40 USD) is one of the expensive parts that Microsoft thinks it can buy cheaper in the future:
Currently Thomson, Samsung and Philips make the DVD drives in the Xbox. It has been speculated that Benq, which handles part of the manufacturing for Philips, is able to quote a higher price for the game system-based DVD drives than the US$40 for the PC-use DVD-ROM counterparts. Benq refused to comment, but industry sources said the company fetches US$42-45 per unit. |
How long that high margin can continue is unclear. The Xbox's lackluster performance in the global market, plus escalating competition with rivals like Nintendo and Sony, has led Microsoft to cut prices of the console and demand savings from suppliers.
On May 10, Reuters reported sources as saying that Microsoft had told major US retailers that it plans to cut the price of the Xbox within days. In Japan, where the Xbox was introduced in February, Microsoft slashed the launch price to US$262. In Europe and Australia, Microsoft cut the price of the Xbox by as much as 38% within six weeks of launch.
As Cnet also reports, the Xbox is not the big success Microsoft has thought it would be (as soon as you can play pirated copies on it, it probably will be) and cutting the prices might help the console to get more populair.
Source: Digitimes
