Not at all. Sony could easily afford a $100 price drop before the holiday season without posting a significant loss, if any at all. Sony will be implementing the new significantly cheaper 45nm Cell processors along with smaller, cheaper heatsinks and other releated components in March. With that, the PS3 will almost definitely be profitible. They'll most likely followup with the 45nm RSX later this year along with overall smaller and cheaper parts. You also need to keep in mind that other parts such as the Blu-ray components are constantly getting cheaper to manufacture as well.

Going off of iSupply's estimates, one 60GB PS3 cost Sony $840 to manuafacture back when the system launched in 2006. Two years later, iSupply estimates that one 80GB PS3 costs Sony about $450 to manufacture. That's a difference of almost $400 in only two years. If we were to average that to $200 in production cost per year, then that puts the PS3's rough manufacturing cost at around $255 by October 2009. However, this line of thinking is extremely flawed because it has to be taken into account that Sony has already taken the most effective and obvious steps to reduce the console's price. (PS2 chips/2 USB ports) To find a middle ground, let's just half the estimate and say that, over the next year, Sony will only be able to reduce the console's manufacturing cost by 1/4th what they have done over the last two years. In which case, the PS3 would be in the ballpark range of costing $350 to manufacture by October this year. That's more than close enough to afford a $100 price drop if they issue it during the lucrative Christmas season, because they could easily make up the $50 loss on every system sold through the huge increase in software sales that it would spur.

i remember reading something estimating the ps3 to use the 45nm (cell and rsx) mid-late 2009

All reports I've seen say the first half of this year. Some reports have even gone so far as to say late Q1 or early Q2. Late March would be my guess. This is only for the 45nm Cell too. The 45nm RSX will likely be at the end of the year.

nice. and if we assume isupply's numbers are correct as of now then once the 45nm chips are in then we can assume the ps3 will be posting a profit (if it maintains its current price point)

lol these were the same guys who made.. "The graph"

The one where wii sales would decrease XD

As far as i'm concerned this is meaningless unless it takes into account the changing exchange rates. in October 2008 the yen averaged 100 yen to the dollar, it is now at 89 yen to the dollar. I don't even know if the original figure of $448 is taking exchange rates into account at all int he first place but even if it does things have gotten worse since then.

First this has been posted several times allready.
Second this is highly unreliable estimation