Feeds

Toshiba's $499 HD DVD player costs 'over $700 to make'

Researcher reveals 'unusual' hardware subsidy

Top 5 reasons to deploy VMware with Tegile

Toshiba is subsidising its HD-A1 HD DVD player by at least $175 in a bid to buy the next-generation optical disc format success. So claims market watcher iSuppli, which took the machine to bits and totted up the cost of all the parts.

Available in the US, the HD-A1 is priced at $499. iSuppli's assessment of the cost of the players' components puts the product's bill of materials at $674 - and that's before the cost of assembly, packaging, peripherals, distribution, advertising, software development and so on. Oh, and that $499 is the retail price - Toshiba will be charging resellers even less for the player.

toshiba hd-a1 hd dvd player

The market watcher said it expects the full cost of the HD-A1 to come in at over $700 a unit - over 40 per cent more than the consumers pays for it. ISuppli characterised this level of vendor subsidy as "unusual".

So why is Toshiba going to far, especially when rival Blu-ray Disc players cost around twice as much as the HD-A1? You can answer that question with just three letters, we'd say: PS3. The next-generation games console launches in November for $499 - or $599 if you want an HDMI port, Wi-Fi and an bigger hard disk. Sony's recent move to delay its own consumer Blu-ray Disc player to later October suggests it really wants folk to buy its games console, even if they only use it as a next-generation DVD player.

sony playstation 3

Either way, the PS3 is likely to define the price point for consumer Blu-ray and HD DVD devices in the coming Holiday season, and Toshiba clearly wants to make the point that HD DVD was there first. The PS3, like all other games consoles, costs much more to make than to buy - the vendors make up the difference on the back of software sales. That's the market environment Toshiba has to work in if it's to compete was the PS3, so perhaps the high HD-A1 subsidy isn't that odd, after all.

The HD-A1 shipped in the US in April. Soon after, early adopters took the machine apart only to find an Intel Pentium 4 running the show. The iSuppli analysis reveals there's a Broadcom HD codec in there too and a set of four Analog Devices DSPs. The box contains 1GB of Hynix DRAM, a 256MB Flash disk from M-System and 32MB of Flash memory sold by Spansion. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Nexus 7 fandroids tell of salty taste after sucking on Google's Lollipop
Web giant looking into why version 5.0 of Android is crippling older slabs
All aboard the Poo Bus! Ding ding, route Number Two departing
Only another three days of pooing and I can have a ride!
Official: European members prefer to fondle Apple iPads
Only 7 of 50 parliamentarians plump for Samsung Galaxy S
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Space Commanders rebel as Elite:Dangerous kills offline mode
Frontier cops an epic kicking in its own forums ahead of December revival
The IT Crowd's internet in a box gets $240k of crowdcash for a cause
'Outernet' project proposes satellite-fuelled 'Lantern' WiFi library for remote areas
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Internet Security Threat Report 2014
An overview and analysis of the year in global threat activity: identify, analyze, and provide commentary on emerging trends in the dynamic threat landscape.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.