Ok not sure what part of my post gave you the impression of fanboyism.  In fact I think your post is the one with the fanboyism, my logic for the PS3 price cuts is based on what I see as financially feasible for the company to sustain while keeping the PS3 competitive.  Where as your idea for the price cuts seems to be based more around making the PS3 as cheap as possible just for the sake of increasing sales.  Which may win the console war but it won't be profitable.  They want to achieve both, and they want to maximise profits, they are a business after all.

The fact is that Sony did lose quite a bit of money at launch and continued to several months past launch.  The "price shuffle" in july was one of necessity, and they never would have done it if they thought they didn't have to.  They want to make their money back in this investment and they want to get ahead financially, but they also want long term success with the console because they know thats where the most money is going to be made.  

Now I agree (and never said otherwise), that when the 60GBs run out they will lower the price of the 80GB, that much we agree on. But I will point out that I don't view lowering the 80GB to $500 as a price cut to begin with, same as the "price shuffle" in july.  The problem is that at launch there was a $500 PS3 and in 4 or 5 months from now the cheapest PS3 will probably still be $500.  How is that a Price cut? Its really a shuffling of models and trying to dance in such a way that people think "oh well I'm getting a great deal here" even though they are paying the same price they always have.  They are getting more for their money but it doesn't change the fact that the price is the same now as it was at launch.  So if you want to call it a "value increase" then sure I'm on board with that, but it simply wasn't a price cut then and it won't be a price cut when the 80GB is lowered.

Anyways, I think it is very likely the 80GB will come down to $500 once the 60GBs are gone.  But I think its also possible to see it lowered less than that, but your idea of seeing the 80GB down to $400 in 2008?  That is simply not going to happen.  Short of Sony getting extremely desperate there simply will not be a PS3 that costs $400 or less in 2008. 

This is why I say a $100 to $200 price cut is not going to happen in the short term.  Because real price cuts of $100-$200 would involve the price being $300-$400 at the lowest SKU.

Maybe 9million if there lucky.. But I seriously doubt 11m.

There's only a couple of ways Sony is going to be able to achieve this:

1) Sony Have a Major Price cut - not some simple one but a massive one which will spur on massive sales.

2) Sony go back to reporting Shipped to Warehouses.

I personally see the only way Sony will achieve this will be to take the 2nd rout. There's NO way they could take another price drop. They've already started selling off their assets to keep manufacturing the PS3. How many Units would they have produced by now? I'm guessing 11 Million / 12 months = 900K shipped to warehouses a month (800k to be safe):

5.5 Mill at march 07 + (800K x 6) = 10,300,000 - 5,500,000 sold to retailers (Wasn't the last report just recently stating 4.7) = 4.8 million Currently Shipped to Warehouses.

4.8 million X $600 each to manufacture = $2.88 billion tied up in unsold produced units. Add on 5.5 million x $200 loss on each (these 5.5 million where produced by march 07 when the cost was $800+ each unit) = $1.1 Billion + $2.88 billion = ~$4 Billion in debt/current loss (Until they sell more units).

I really don't think they can afford another price drop unless they intend on selling off more of their assets.

If they keep producing 800K (900k) a month till end March 08 and they go back to reporting shipped to warehouses then Yes, they may catch/hit/surpass the 360. But in terms of Sold to consumers...even retailers... i don't think so.

For Sony to reachsurpass Xbox 360 by March 08 They must be under the impression that MS will not sell a singly Unit between now and April 1st. What sis MS sell last Christmas? Does Sony expect to sell 2 - 3 times that amount this Christmas?

Why didn't Sony just make a 400 Dollar 40 Gig to begin with. If they had done that, they would have had no problems.

I think that Wii's sales will go down and PS3's sales will go up, in 2008.

There is no way. If they can get their system to $300 by Xmas 08, and have a killer 08 lineup, PS3 has a chance to pass 360. But Microsoft would have to really drop the ball and have few games planned...

@andrewpeirce

Sure, Microsoft will already be prepared if this happens 8)

Well Sony said they would sell 6 million units by March 07. M-maybe they should focus on selling those first.

Besides it's again Sony PR: sales rise expentially around christmas, last year the XBox sold 2,5 million units in that time. So it is easy to state that you will reach you're opponents sale right before sales begin to boost.
On the other hand, even if they sell 3 million in december it would still have to sell as good as the Wii now to reach that 11 million. And probably MGS will be pushed till after march to make '08 sales look better.

I think Sony's analysts should stop using motion controls to enter their data, but on the bright side: at least something will rumble next year :).

 I know he's already been banned, but this made me rofl.

bullshit!