HappySqurriel on 31 March 2008
A current factor which is not being considered is the impact of inflation and the falling US dollar ...
It is not a secret that the US government's inflation numbers (dramatically) underestimate inflation, and the value of the American dollar is falling at a steady rate. If the US averages an 8% real inflation rate over the next few years the price level will increase by 26%, 10% real inflation rate would be 33% higher, and 12% will lead to the price level being 40% higher. What this means is that Sony will have to reduce their manufacturing cost to between 35% and 40% of their current level in order to sell their system at $200 with the same (proportionate) profit/loss.
