Indeed, and that would mean it would likely have to stay at $500 even when the 60GB is sold out. 

You are completely realistic for the hd's. My calculations show for the PS3 production costs (total cost):

$880 intial production run (roughly 4-5 Mio units, many sold by now)

$620 (roughly 4-5 Mio units now in production/on sale)

$420 (units in production starting sometimes in 2008)

The final numbers given in the article are roughly correct - the breakdown is often completely wrong (I do have some insight into that matter which would be too complex to explain).

Looks like they will be making some money on each one sold in Canada too on the 80gb units.

It's the 60 GB breakdown without the emotion engine apparently.  Anyone wanna ballpark how much that costs for the 60 gigs still in stock?

Why does it say Sum of Qty = 2 for the Hard Drive?

Anyways, this is good news for Sony, from 840 to 640 in about 8-9 months, maybe even less since this data seems to be a couple of months old since it's speculating only on the 60GB.

^^^^
Yeah, I really doubt that either retailers or consumers would accept a $100 price rise.

The way I see it, they'll keep the 80GB at $599 throughout the holiday season, remove Motorstorm and drop it to $499 immediately after, and then drop it to $399 in March/April in time for MGS4, Gran Turismo 5, GTAIV, LBP, Socom 4, and Killzone 2.

loosing less money is better than loosing a lot of money...but's still not good news.

640$ for each unit just shows that Sony can't afford any further price drop during holiday season.

The problem for Sony right now is, they have ALREADY made like 5 or 6 million consoles with the old hardware price (~$750-800) so they need to sell those consoles (which are currently on store shelves / in warehouses) before they can realize the gains of their improved costs.

They wouldn't do another price drop during the holiday season even if they could afford it, so this really isn't an issue.

 I was not saying their production cost should have come down on it by now, I am saying that it was never that high for them to begin with.  Small HD's like 20-80GB's have been down around these costs for a very very long time (even for laptops).  What you have to keep in mind is that if there isn't at least some margin for profit on these items, sites like newegg stop carrying the parts. And as you say, Sony's big orders coupled with cutting out the retail margin should be a sizeable break in price. 

In either case unless someone has numbers from reliable sources as to what sony pays for these HD's we won't have any facts to know what their costs really are. Its not a big deal in the scheme of things anyways, at the absolute most its like a $20-30 difference.