Toshiba: Massive loss with each HD-DVD player sold at $99 price point
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A figure from 3 generations ago... I'd be surprised if that still even remotely held up, especially if Wal-Mart purchased them for $250 ea. from their suppliers. (posted in another thread by the spouse of a Wal-Mart PO person).
It was just a closeout sale on the 2 series before the 3 series comes out. Better to get some $$ than be stuck with a bunch of inventory.
That's the assumption, that it was a 'fire sale' on old stuff... that doesn't explain the HD-A3s for $99 at Fry's though.
It was much more likely competitors jumping on Wal-Mart's hype.
so?
Sony lost over 844 mill in one quarter in their game division due to the PS3.
Sony profits up, but PS3 losses double - Engadget
Sony reported its second quarter earnings today, and while the company's overall profits were up, at ¥90.5B ($790M), the Playstation division's losses for the quarter came in at ¥96.7B ($844M), double those of a year ago. Sony says that once it's done accounting for all the recent PS3 inventory changes, it hopes the Playstation division will break even -- potentially in the second half of the fiscal year. Of course, since the PS3 is sold at a loss, the numbers might indicate that Sony's selling more PS3s than ever, but something tells us that's not exactly the plan.
And they cut the prices another 100 bucks per unit?
Can you say losses over 1 billion dollars this quarter?
Sony lost over 844 mill in one quarter in their game division due to the PS3.
Sony profits up, but PS3 losses double - Engadget
Sony reported its second quarter earnings today, and while the company's overall profits were up, at ¥90.5B ($790M), the Playstation division's losses for the quarter came in at ¥96.7B ($844M), double those of a year ago. Sony says that once it's done accounting for all the recent PS3 inventory changes, it hopes the Playstation division will break even -- potentially in the second half of the fiscal year. Of course, since the PS3 is sold at a loss, the numbers might indicate that Sony's selling more PS3s than ever, but something tells us that's not exactly the plan.
And they cut the prices another 100 bucks per unit?
Can you say losses over 1 billion dollars this quarter?
The loss could be worth it to them if HD-DVD wins the format war because the amount of players in the households greatly increases resulting in more HD-DVD titles being sold/rented.
The claim of "massive loss" is obviously bogus, but a couple of actual facts:
The Wal-mart price promotion was a Wal-mart promotion. A forum member on AVS & Highdefdigest that I've always respected as a straight-shooter, ack_bck, posted on AVS that he lives in Utah, which apparently has an "anti-loss leader law that prohibits retailers from selling items below cost. He was in line at Wal-mart to buy one of the players as a gift, and the electronics manager came out and announced the price of the A2 was $185, indicating Wal-Mart's actual cost.
And, Toshiba takes a "Good/Better/Best" approach to most of their product lines. The A2/A3 is their lowest priced, entry level HD DVD player. The A30 is their mid-level player model, selling for around $325 on Amazon, and the A35 is their top of the line model, selling for around $400. I suspect there's a just bit of profitability int the A30 & A35, to level things out.
I did my part - I bought the A35 a week & a half ago, to upgrade my 1st gen XA1.
The Wal-mart price promotion was a Wal-mart promotion. A forum member on AVS & Highdefdigest that I've always respected as a straight-shooter, ack_bck, posted on AVS that he lives in Utah, which apparently has an "anti-loss leader law that prohibits retailers from selling items below cost. He was in line at Wal-mart to buy one of the players as a gift, and the electronics manager came out and announced the price of the A2 was $185, indicating Wal-Mart's actual cost.
And, Toshiba takes a "Good/Better/Best" approach to most of their product lines. The A2/A3 is their lowest priced, entry level HD DVD player. The A30 is their mid-level player model, selling for around $325 on Amazon, and the A35 is their top of the line model, selling for around $400. I suspect there's a just bit of profitability int the A30 & A35, to level things out.
I did my part - I bought the A35 a week & a half ago, to upgrade my 1st gen XA1.
Too bad. I never saw any Fry's ads for it. And, I live in Fry's territory. But, I got an A2 for $99, so I'm not bummed. But an A3 for $99 might have been cool, as it's front panel better matches the Toshiba DVD recorder I have.
OTOH, I hear that the A3's audio section isn't as good as the A2. Also, I can tell from internal pics of the A3 that it's more cheaply made than the A2.
OTOH, I hear that the A3's audio section isn't as good as the A2. Also, I can tell from internal pics of the A3 that it's more cheaply made than the A2.
The audio performance between the A2 / A3 has to do with playback of Dolby Digital Plus & TrueHD over the digital optical output. Both those audio codecs exceed optical's max bandwidth of 1.5mbps. The A2 down mixes them to DTS @ 1.5mbps. The A3 down mixes them to only DD @ 640kbps. The change made probably to lower productions costs.
Audio playback via HDMI is unaffected, the same for both models.
Losing $500 is a laughable number. Maybe based on first year pilot production, but not on the A2.
I work for an company that makes mid-volume products, I do engineering cost analysis for a living. Even if the A2 was costed at $600, the real price is often a fraction of that. Let's say we analyze the cost of my design at $100, the real materials and labor is usually a tenth of that. Often a huge chunk of the number is overhead and tooling, and that is usually budgeted for 1 year or less; if Toshiba planned on a 9 month sales life cycle for the A2, then $90 of the $100 is already paid for. Plus, you must remember, in some other countries they pay 2-3x for CE goods; that helps termendously with the US getting goods at or below manufacturer cost. My company does this ALL the time; customer "A" buys 100 units at cost customer "B/C/D" buy 100 units total at 3x the cost, we still make a huge profit because "B/C/D" buy in smaller lots and will not complain about the price. I travel to the EU frequently, and often see the same models of CE stuff selling for 2-3x more than what we pay in the US; IIRC the PS3 was selling for ~2x the US price.
I am not saying that Toshiba isn't losing SOME money in the US, but they certainly have a global strategy to stay afloat.
I work for an company that makes mid-volume products, I do engineering cost analysis for a living. Even if the A2 was costed at $600, the real price is often a fraction of that. Let's say we analyze the cost of my design at $100, the real materials and labor is usually a tenth of that. Often a huge chunk of the number is overhead and tooling, and that is usually budgeted for 1 year or less; if Toshiba planned on a 9 month sales life cycle for the A2, then $90 of the $100 is already paid for. Plus, you must remember, in some other countries they pay 2-3x for CE goods; that helps termendously with the US getting goods at or below manufacturer cost. My company does this ALL the time; customer "A" buys 100 units at cost customer "B/C/D" buy 100 units total at 3x the cost, we still make a huge profit because "B/C/D" buy in smaller lots and will not complain about the price. I travel to the EU frequently, and often see the same models of CE stuff selling for 2-3x more than what we pay in the US; IIRC the PS3 was selling for ~2x the US price.
I am not saying that Toshiba isn't losing SOME money in the US, but they certainly have a global strategy to stay afloat.
