Toshiba is selling the HD DVD players below cost
By Matt Burns 
posted Jun 23rd 2006 11:44AM
posted Jun 23rd 2006 11:44AM
Toshiba is taking up a somewhat common practice in today's cut-throat electronic scene. They are selling the HD-A1 at a large loss like Microsoft and Sony do on their game system. The HD-A1 sells for $499 but marketing firm iSuppli estimates that it costs more the $700 when packaging and manufacturing is added to the $674 cost of parts. But this is what Toshiba felt was needed to undercut Sony and Blu-ray. Don't forget though that they are making money on the discs themselves too. They own the license to the format so when ever someone buys a HD DVD film, they are making money. It might not be as much as a $1,000 Blu-ray player but it is still money.
That begs the question. Why isn't the BDA doing the same? If Toshiba wants to give me the razor to profit on the blades then fine. I'm ok with that because my initial cash expenditure is lower.
With the BDA it seems they want profit on the hardware and media. That's fair..they aren't a charity but I'm liking Toshiba's gameplan right now. Show me the money!!
I dunno if 'tis quite $700. They are selling those things to best Buy around $314.
I don't doubt there is some sort of a loss on them - but hey, who is complaining (besides the Blu-Ray folks - don't worry kids, your subsidized BD player is coming out on November 17th)?
I saw them online for a little over $400 with free shipping.
So, my question is, can we get a review already of what the player is like after the firmware update?
After I saw it disected, I could tell they were selling it for a loss. It's basically a computer, a very dedicated computer. It has a PC HD-DVD drive (that alone caused me to think that $499 is way low), then add P4 CPU, DDR memory, etc. etc. If this were an XBOX, it would get hacked. How cool would it be to stream HD over the USB port to another PC, or install an internal hard drive?
I hear it behaves itself quite nicely after the firmware update. Still loads media slow (because it is a PC after all), but after that seems to work well.
So, were first generation DVD player and VCR's being sold immediately for a profit?
BTW, I think many forget that the first deliverable prerecorded content was for D-VHS, and movies on that system came out as D-Theater, which required a JVC player with an initial $2K list price and still go for $500-600 new.
Toshiba is not taking a $200 loss on these. If Dull (Dell) can sell a $499 computer with monitor for a profit then Toshiba can sell a playeresque computer and at least break even. Oh yea and what about RCA? Does Toshiba own that company? They also sell a $499 HD DVD player.
Know it all brings up a good point. I can see Toshiba taking a loss, but why would RCA do the same? RCA is most likely selling it for a profit-- unless Toshiba is subsidizing RCA, but then you have to ask yourself why would they do that?
I saw the third party who is guessing at the cost of the components is off. Toshiba probably negotiated a good deal with it suppliers. It's probably less costly than we believe.
Hello Toshiba is losing money on each player and so am I, having now had two HD-XA1s here and neither would play standard or Superbit discs worth a damn; the Fedex back to Mass. is killing me here, and the first unit was a highly anticipated gift.......don't they freaking Test anything????
Tim in Phoenix