Sony's Blu-Ray cost cuts prompt talk of lower PS3 price tag

"If the cost of Blu-ray is coming down, you can drop the price of anything with Blu-ray in it," said Arvind Bhatia, an analyst with Sterne Agee & Leach Inc.

Sony said cheaper component costs and production "efficiencies" make it cheaper to manufacture Blu-ray, which is named for the blue-colored light used to read data stored on discs. The technology's being positioned as a better alternative to the popular DVD format.
Sony's already announced one price cut based on its newfound Blu-ray chops. On Monday, a company representative said it will begin selling a new version of its Blu-ray video disc player later this week for $500, which is $100 less than what it previously said it would.
The next Sony product expected to have its price cut, say analysts interviewed Monday, is Sony's PlayStation 3 gaming console, which comes with a Blu-ray video player.
While Sony makes scores of different devices, its PS3 is among its highest profile product lines, and has become much more important to the company's bottom line.
Any price cut is sure to boost PS3 sales, and sales of games designed for the console, Bhatia said.
According to NPD Group, at least 1.3 million PS3s have been sold. That nearly half of the total sales of Nintendo's Wii consoles, and about a quarter of the 5.4 million Microsoft Corp.'s Xbox 360 consoles that have been sold.
At $700 for some models, the PS3 ranks as the most expensive of the best-selling devices. The hefty price tag has helped to throttle sales since its introduction last year.
Source :http://www.marketwatch.com/