Many hardware companies make a ton of profit by not passing manufacturing efficiencies quickly to consumers. If you have desired product and good marketing, fast price cuts are not necessary at all. If you always have to be reducing prices, your product is a commodity and your margins will always be razor thin.

Look at Dell vs Apple. Dell is always cutting it's prices, it's computers are nothing more than a bulk commodity. Apple on the other hand has a superior product and marketing strategy that allows them to maintain prices, thus increase profits. 

There won't be any price drop this year. If things go extremely poor (no long term increase of sale after Heavenly Sword and Lair) they will drop price to 549$ or 499$ in December. That's all. Without strong lineup of games price alone won't sell PS3.

I think cost reduction around 100$ as for 6 months period is an amazing thing. Sony is still in red but the situation is much better for them right now. Much better doesn't mean good though.

Nice to hear Sony has finally cut the costs of BR.... But i still think your really delusional if you still think Sony will drop PS3's price in 2007...  

They made a loss of 200 US$ per unit sold... So they still aren't at breaking point... And if they were to break even... Why cut the cost with 150US$?! Then you'd make a loss again...!

We won't see a pricedrop until earlt 08... And if they were to cut price of PS3 then it'd probably will only be about 100US$...

(Why not cut PS2's price?!... Make it 80US$, just like the NGC... Then it will sell far beyond X360 and PS3...)

Microsoft's hardware costs aren't directly tied into another product.  Microsoft doesn't make money everytime someone buys a movie to watch on their game system, either.  Sony gets to operate their console in an entirely diffrerent manner than Microsoft does, because right now it's pulling double duty.  They are able to both reduce the cost of parts more rapidly (same problem MS had last gen, too) and afford to use the system as a loss-leader for the big money arenas of both games and movies.

Also, if you'd read Kwaad's post, he clearly says he thinks they'll have a price cut in 2008.  He says it in the very post you quote, yet somehow you completely miss it?

 Aren't Sony loosing like $200 on each console, so if they cut $131 off the price, that saving is not necesarily going to go to the consumer. But I think that they will impliment the smaller cell, and the RSX will be cheaper. With the smaller cell, they will be able to cut costs on the ventilation, which would increase the money saved, which would probably mean that if they could save enough to allow them to sell it without loosing money, then they could probably cut it by $100, so that it was $500/£300, although they might consider cutting it to $480 to make it equal with the 360 Elite

 Kwadd says early 2008

 iandrade says end 2008(aparently from the PRESIDENT OF SONY)

Latest 360 Elite production cost:

http://www.digitimes.com/systems/a20070507PD200.html 

According to the artical, total cost of 360 Elite is $323.30 now.

On the other hand, after the expected $100 price drop, it will still cost Sony $740.35 to build a PS3.

 That must be a typo in that page. The retail cost for the Elite, on that chart, is $399, and the HDD costs less than the PS3's.

 So that's just the premium's cost, which has been known for a while.

I doubt it's possible to save that much just through savings on the PS3's cooling system. And BTW, that $131 figure is based on the Blu-Ray drive costing $50 right now, a number which came from Kwaad without any source... Do I need to keep going?

 We all know that this is simply speculation