Toshiba's $499 HD DVD player costs 'over $700 to make'

June 23, 2006

The
Register Hardware reports that Toshiba is likely sponsoring the first release of
their HD-DVD players. According to a market watcher company Isuppli the company
is selling the players below its cost price. A reason for this could be to make
sure it is competitive to the Playstation 3.

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.

The iSuppli analysis reveals that the player
contains a Broadcom HD codec 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. Discuss HD-DVD players in our Satellite, HD-TV, Blu-ray and HD-DVD
Forum.

Source: Reghardware