It's a deliberate shortage because they are losing money. The more they sell the more they lose.

The loss is too big to recoup on game royalties like previous generations.

Why would they want to cut the price to sell more? That would make the problem even worse.

I love my PS3, I think it is a great value with great games and the lady friend loves to watch Angelina in HD on Blu ray. That doesn't make it a good business model.

Edit: There are shortages, not like the Wii, but in certain areas the PS3 is not readily available at everystore.

I would imagine they are barely losing anything if not turning a slight profit on the PS3 by now. Some of the new models already have 65nm RSX chips and we should see PS3's very soon with 45nm Cell chips.

Maybe, but there are two more issues.

1. They lost a lot of money already, to increase production capacity would require investment in capital. It probably isn't worth it or there'd be plenty of PS3's. (This is the same reason Nintendo is really slow to increase production)

2. There is no guarantee that demand will still be there. As the third place console, Sony is playing it safe. They may be the first to see a decrease in demand.

I can imagine that Sony is in a situation similar to this one (though definately more complicated):

have 2 factories produce at ~60% plant utilization to meet demand or have 1 factory produce at 100% to meet 80-90% of the demand

and to cut costs they chose the second option

Given the Financial state of the company and the glum economic forecasts if Sony had managed to just breakeven on production costs they would have made an immediate formal statement.

I would say they are still making a considerable loss per console. It was initially 400$ loss per machine I seem to recall so I figure that they are losing between 100$ and 200$ per machine at the moment.

I think they simply want to wait and see if XB360 sales increase lasts or is transitory before acting, as if XB price cut leaves only a modest increase after the first spike, Sony won't have any will to cut prices. Also Sony doesn't want to let MS know its countermeasures too early. And they also want to distract people a little from the attention XB360 justly gained during the last weeks.
So I'd expect a lot of talk by Sony in the next two weeks, but nothing substantial.

Of course there are shortages. Thats the only way to explain the less than glowing sales. Its impossible that people would simply prefer to play on the cheaper wii and cheaper 360.

Impossible

While the smoke curtain effectively does its filthy job, Sony prepares its mighty counterstrike:

Sony's chief weapon is surprise.

I think it is down to a few things:

1) Waiting to see if 360 will continue as they are from the price drop or go back to normal.
2) Waiting to see how much of an effect R2 and LBP have.
3) Gather units for the holiday season- so although they maybe able to supply more consoles now, they maybe holding off and gathering consoles for xmas.
4) Clearing older SKu for the 180 SKU along with a price drop for xmas after the 360 price drop has worn off.
5) Waiting for TGS to make some big announcement.