Whenever TSMC gets enough capacity on their 22nm line to start manufacturing the APU at 22nm. Currently the PS4 APU is ~350mm2 which is fairly large, 22nm is roughly a 40% shrink so should bring the APU down to 210mm2, which will mean Sony gets roughly 33% more APU's out of each wafer (which is how TSMC charges for fabrication).

The APU is estimated to cost ~$100, so a 33% cost reduction brings it to ~$67. Then you get lower power consumption so the PSU can be shrunk (currently its rated to 250 W even though peak power is ~ 150W). Then Samsung is now manufacturing 1Gb GDDR5 chips which will allow Sony to reduce the memory chip count from 16 to 8 which should net them ~ 30% cost reduction (the higher capacity chips will cost more than the older ones) and the motherboard will get smaller as a result.

So you're looking at roughly $50-$80 savings from the component cost reduction alone, a reduction is packaging costs and case size enabled by the reduction in PSU and motherboard size will probably eak out another $20, so sometime this year Sony may be able to reduce the cost $100 without hitting profit. E3 or just before black friday would be the logical time to do it.

Alternatively Sony will do all of the above and keep the price at $399 because they can, though I think once XB1 makes the above shrinks MS will cut the price as soon as they can, which will force Sony's hand.

Tbh there is no slowing down. At $399 they are still dominating. Imo they will cut $349.

in august-sep and a 50$ price cut.

Announced at e3 for either a 50$ or 100$ with no/15days psplus.

This. And since everyone here is starting to predict sales in the range of 100-155m units, it won't have a price drop until maybe 2017. Maybe the holiday season of 2016.

When the sales take a dive

Think about this: I'm still waiting for a price cut for PS3 with a decent hard drive for less than 199'99.

$349.99 in September, probably to counter Halo 5 and cash in on Madden season.

I am expecting a $100 price cut at E3. Sony did the same thing with PS2 back when it had no competition. Right now they have MS off to a decent start, and playing really hard to be competitive.

With all of the cash flow they have comming in from PSN, and the fact they have been profitable on hardware for a long time on PS4 already, I think the smartest play is to try and stop the competition before they can ever get any momentum. Accelerate the growth of the userbase, and let the network bring in massive amounts of revenue and profit, from Games, PS Vue, PS Music, PS+, and an ever growing list of content.

2016 together with The Release of Morpheus and PS4 Slim.