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Study: Price Reduction Continues on High-Def Players

20 Dec, 2007 By: Chris Tribbey

With the rate that high-def player prices are falling, consumers likely will see sub-$300 high-def players across the board next year, and less than $100 by 2011, according to a new report from research firm Understanding & Solutions.

“Blu-ray and HD DVD player prices have been falling since the summer, culminating in Toshiba's loss leading sub-$100 HD DVD player,” said Jeremy Wills, consultant at Understanding & Solutions. “Price reductions in the U.S.A. have continued into December, with Blu-ray players dropping below $300 for the first time, and HD DVD players below $200.”

Understanding & Solutions' senior technology consultant Bill Foster added, “Drive, chipset and other system components are now benefiting from economies of scale. In early 2008 we're going to see the bill of materials for a basic high-definition player, in either format, weighing in at less than $150 … providing the consumer with a choice of low price players that allow CE companies a margin for profit.”

The report also notes that Blu-ray's lead in software sales is largely due to better studio support, and that the move by Paramount to go HD DVD exclusive “failed to turn the market.”

“As demand grows and manufacturing volumes build, we're going to see the costs of releasing on two different formats really start to bite. There may be surprises just around the corner, and we could see a lot more format clarity in 2008,” Wills said.

The report predicts that 34% of U.S. homes will have an HDTV by the end of the year, and up to 90% in 2011.

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