Ps3 price cut all but confirmed before xmas .

[omgwtfbbq]

Dryden said:

Alacrist said:

If the production cost goes down by 241.35, (if Blue was right about that number), in a year then maybe they will do a 100 price drop. Can production cost go down that fast with the Cell and Blue-ray?

Production costs should drop substantially by early next year. There are two ways to interpret Moore's Law -- that the number of transistors per integrated circuit doubles every 24 months, -- one is that processing power/hardware will double in speed while remaining the same size, and the other is that hardware size and cost will be halved, while remaining the same speed.

From what I've read, the three most expensive components are the Cell processor (~$89), the nVidia Reality GPU (~$129), and the Blu-Ray drive (~$125).

In order:

Cell yields are terrible. Because the cell processor is a 64-bit PowerPC + eight SPE vector processors, the margin for error in producing nine processors on one chip is very, very narrow. Early reports were that cell yields per wafer were in the order of only 10-20%, whereas simpler chip yield rates can typically reach in to the 95%+ ranges. e.g., If Sony, IBM, and Toshiba are indeed "throwing out" 80-90% of the processors they're producing currently, once they better understand the manufacturing process and produce more consistent results, they'll increase cell chip output by at least 400%, without absorbing any additional manufacturing cost. Fixing yields + following Moore's Law would mean the cost of per-cell manufacturing should drop to (and I'm going to be real conservative here) ~$35 over the first two years of the PS3's life, so Sony saves ~$54.

nVidia's GPU would see a similar price drop, and this will be the biggest saving passed on to Sony. If GPU manufacturing prices are cut 50% after 24 months, Sony saves ~$65 there.

Magnetic and optical media, while not usually thought of in the sense of their processing power and number of transistors, still seem to follow the same price trends, so there's no reason not to expect Sony to save ~$63 per unit on Blu-Ray.

Add those three up and you knock off $182 per console build. Now, toss out the EE ($27), and similarly lower the RAM ($24 from $48), I/O Bridge ($30 from $60), Seagate SATA HD ($27 from $54) and the Power Supply costs ($19 from $38), adjusted for Moore's Law, and you have a savings of another $127 from all of that.

Total expected manufacturing drop in 24 months: at least $309. That's not counting the nickel and dime stuff like Bluetooth & 802.11g, but that is already so low it's not worth cutting in half -- maybe $5 - $10 total there too.

So, assuming the costs of the other components remains relatively static, the build price of the PS3 should go from $840.35 down to $531.35 by approx mid-2008, and down to $376.85 by mid-2010, and so on and so on.

Where all of this fails in the face of price cut speculation, however, is the fact that these obvious cost savings (and the non-obvious ones too) cannot be realized until new units are built. Sony allegedly has about 1.9M old units sitting in warehouse. They really need to get those sold first, and without a price-cut affecting that initial 5.5-6M run, where they're already hemorrhaging cash.

you are applying moores law to where it does not belong. It belongs in processors ONLY. Other things to not follow this trend. For instance, the price of RAM tends to fluctuate a lot, and drop slowly, to be replaced by larger RAM, it definitely does not halve every 24 months. RAM tends to get larger rather than cheaper.-

Hard drves tend to bottom out at a certain price, for instance, you might drop $10 off the cost of a 60GB HDD tops. While in 2 years you miht find a 120GB HDD for the price of the 60B, the 60B won't be half the price it is now. In a couple of years, you miht find a 60GB HDD is MORE expensive than a larger one due to the numbers that are being produced. I really don't expect Sony to save much money on the hard drive or RAM.

Optical media is an interesting one, it hits a point and drops extremely rapidly. If sony only saves half the money on blu-ray in 2 years I will be incredbly shocked (unless the format flops). Power supplies, on the other hand, don't get any cheaper. Don't expect much of a saving there.

You can't apply moores law to anything other than transistors, different components price reduce differently (if at all)