[Natoma]

http://arstechnica.com/news.ars/post/20060406-6544.html

Research firm In-Stat has released a report that looks at the potential market for the two battling next-generation optical formats: Blu-ray and HD DVD. The report starts off by analyzing a bill of materials for "blue laser players" and came up with a round figure of about US$400. This includes not only the hardware, but royalty licenses for the various codecs included in the players.

While the bill of materials does not present the full picture of what it costs a company to manufacture a product, it is a useful guideline for calculating the retail price. The first models of both Blu-ray and HD DVD players are being demonstrated now, with availability scheduled for the next couple of months. Blu-ray players are thought to cost more to manufacture than HD DVD ones, and this appears to be borne out by the current retail price of the cheapest HD DVD player (the Toshiba HD-A1 at US$499) compared to the least expensive Blu-ray device (Samsung's BD-P1000 at US$999).

I can understand one reason why MS decided to go with regular DVD rather than HD-DVD. I can't see any way that will allow Sony to not lose their heads with the PS3.

Maybe that 400-500 Euro/$500-$600 USD price that was quoted wasn't so far fetched? And even then, I would think Sony would be losing $400-$500 per console based on all of the things that have to go into the system.

Ouch.....

[Carl B]

A couple of points.

First of all, the news is covered here: http://www.beyond3d.com/forum/showthread.php?t=29768

Second of all, In-Stat's estimates are only best-guess on their end; we don't know that they are 'right' or 'wrong' as yet. Not to say I'm going to get on their ass as quickly as I do M-L or the others... this being In-Stats specialty more or less afterall.

Third of all, though PS3 will absord the price of several key Blu-ray player components (optical pickup unit, diode, etc...), the Cell and RSX will provide the functionality that a standalone player requires specialized IC's for - part of that $400 cost. Casing and I/O - though minor of course - are also absorbed.

Fourth of all, I imagine by the time PS3 begins mass production, some of those costs will have come down

But all of this aside, I do expect Blu-ray to be the single most expensive component inside the PS3. It's just hard to know at this point how much it'll cost Sony later this year to include.

[Natoma]

Originally Posted by xbdestroya

A couple of points.

You have four points. A couple is two.

Originally Posted by xbdestroya

First of all, the news is covered here: http://www.beyond3d.com/forum/showthread.php?t=29768

Doh. People need to make their thread titles more descript.

Originally Posted by xbdestroya

Second of all, In-Stat's estimates are only best-guess on their end; we don't know that they are 'right' or 'wrong' as yet. Not to say I'm going to get on their ass as quickly as I do M-L or the others though - this being In-Stats specialty more or less afterall.

Agreed. However, I wouldn't think that they would be that far off. Maybe ~10% +/-, given that this is indeed their specialty. At this point in the development cycle of Bluray/HD DVD, I would also assume that the costs are pretty well nailed down considering the drives should be in mass production.

Originally Posted by xbdestroya

Third of all, though PS3 will absord the price of several key Blu-ray player components (optical pickup unit, diode, etc...), the Cell and RSX will provide the functionality that a standalone player requires specialized IC's for - part of that $400 cost

So you're saying that the PS3 Bluray drive will differ from a standalone in that the CPU and GPU will take on the tasks that are normally offloaded. Ok, understood. However, do we know how much the components of Cell and RSX that will handle that will cost in comparison to the standalone Bluray option? In other words, do we know whether or not it would've been cheaper to not offload that to Cell and RSX, but instead include the dedicated hardware?

Originally Posted by xbdestroya

Fourth of all, I imagine by the time PS3 begins mass production, some of those costs will have come down

Shouldn't PS3 be in mass production now if they're aiming for a fall launch?

[Carl B]

Originally Posted by Natoma

So you're saying that the PS3 Bluray drive will differ from a standalone in that the CPU and GPU will take on the tasks that are normally offloaded. Ok, understood. However, do we know how much the components of Cell and RSX that will handle that will cost in comparison to the standalone Bluray option? In other words, do we know whether or not it would've been cheaper to not offload that to Cell and RSX, but instead include the dedicated hardware?

Well, what I'm saying is that Cell and RSX are in there anyway; you know, to play games and stuff. So I'd say the answer is definitively 'no,' including the specialized hardware would not save them money. Now, how much that hardware costs - ie what part of In-Stats $400 it represents - I have no idea. I'm sure some people here from the A/V crowd may have an idea though, and basically Cell and RSX would reduce the costs by that x amount.

Shouldn't PS3 be in mass production now if they're aiming for a fall launch?

I know you don't frequent the console side of the forum much Natoma so I don't blame you for not knowing, but no, PS3 mass production should start in August or something. I forget exactly when, but it's the topic of another thread from a week or two back.

[randycat99]

Originally Posted by Natoma

Agreed. However, I wouldn't think that they would be that far off. Maybe ~10% +/-, given that this is indeed their specialty. At this point in the development cycle of Bluray/HD DVD, I would also assume that the costs are pretty well nailed down considering the drives should be in mass production.

This might be true if the "art" of market research was even remotely an exact science. Since it isn't, it could be anywhere from 10% off to 100% off, and no one can really step forward and say they know which it will be w/o it being utter BS. That is the nature of best guessing. You might be better off using statistics to nail down "probability of being right", rather than % closeness to the correct answer, at this point. The whole scene is pretty far removed from any notion of "concrete", ultimately.

[expletive]

Originally Posted by xbdestroya

Third of all, though PS3 will absord the price of several key Blu-ray player components (optical pickup unit, diode, etc...), the Cell and RSX will provide the functionality that a standalone player requires specialized IC's for - part of that $400 cost. Casing and I/O - though minor of course - are also absorbed.

Wouldnt a stand alone player have either a cell (Sony) in it or some broadcom HD dedicated IC(Samsung, Pioneer)? I doubt a dedicated IC which would take the place of Cell/RSX in a stand alone player would cost $200 (as cell/rsx do). Theres a dedicated IC in my HD cable box that decodes compressed HD and then scales it. Maybe not the same quality but the point being these chips are not bleeding edge and have been around for quite awhile so their cost is not likely to be anywhere near $200.

EDIT: Here's what replaces the Cell and RSX in HD Optical players (if its not the cell):

Broadcom Announces First Fully Compliant High-Definition Decoder Chip for Blu-ray™ Disc and HD DVD™ Media Players
New HD Decoder Chip is Based on Field-Proven Technology Developed for High-Definition Set-Top Boxes for Cable, Satellite and IPTV Applications

LAS VEGAS, Jan. 3 /PRNewswire-FirstCall/ -- 2006 International CES -- Broadcom Corporation (Nasdaq: BRCM), a global leader in wired and wireless broadband communications semiconductors, today announced the industry's first high definition (HD) audio/video decoder chip that is fully compliant with the emerging Blu-ray™ and HD DVD™ optical disc formats. Compliance with Blu-ray and HD DVD formats permits the recording and playback of high definition video on blue laser-based optical disc media and drives. Broadcom's latest high definition decoder chip enables a new generation of consumer electronics devices that can decode compressed HD video stored on Blu-ray or HD DVD formatted discs.

"The worldwide adoption rate of large-screen HDTV sets by consumers has increased significantly over the last year," said Michelle Abraham, Principal Analyst at In-Stat. "There is now an enormous opportunity for consumer electronics manufacturers and Hollywood studios to supply consumers with high- definition media players and movies. As a result, we anticipate strong movie title and media player introductions in 2006."

Announced today is the Broadcom® BCM7411D HD A/V decoder chip. The new chip supports H.264 (also known at MPEG-4 Part 10/Advanced Video Coding (AVC)) and VC-1 (SMPTE 421M), the SMPTE standard based on Microsoft® Windows Media® Video 9. Both compression standards are mandatory for Blu-ray and HD DVD optical disc formats. The BCM7411D also supports high definition MPEG-2 decoding and provides full backwards compatibility for current DVD video titles as well as new HD DVD titles that may be authored in an MPEG-2 format. A single-chip high definition decoder, supporting all three compression standards, enables manufacturers to build a new generation of media players that support both high definition optical discs as well as existing DVD video titles.

Also announced today is Broadcom's BCM97438 reference platform for the development of Blu-ray and HD DVD media players. The platform includes a reference board featuring the new BCM7411D HD A/V decoder chip and Broadcom's BCM7038 dual-channel HD digital video system chip, as well as a software platform that offers OEMs a wide range of integration options.

The BCM7411D is now shipping in volume quantities. Pricing is $25.00 each in quantities of 100K..

http://www.electronics-express.com/a...leID=175803935

The BCM7038 is available today and is packaged in an 841-PBGA with pricing
of $60 each in 10,000 piece quantities.

http://www.prnewswire.com/cgi-bin/st...2084610&EDATE=

Thats $85 in ICs as opposed to $200 for cell/RSX. The biggest announcement at E3 will be the PS3's price, i hope we get it.

[randycat99]

So you are suggesting a standalone player that contains a version of Cell will w/o a doubt be the full blown PS3 version + RSX chipset? You really think that is necessary for a standalone player? This is the foundation of your argument?

[Carl B]

Thanks for the pricing info Expletive - honestly I do appreciate it - but I think you, like Natoma, are confused as to what I was saying.

I feel like you guys are trying to tell me that perhaps Cell and RSX aren't the best deal for forming the IC-backbone of a standalone Blu-ray player. Well no sh*t!

My point is that, in Natoma's original post, he was basically wondering how Sony would absorb the $400 hit of including a Blu-ray drive. But what I was pointing out was that even assuming In-Stat is correct - it's not a $400 hit to Sony, because that $400 includes IC costs that Sony isn't going to pay because their existent CPU and GPU do double duty in that regard.

Ok so I hope that clears up any confusion here... I'm not saying that Cell and RSX present a better value to a dedicated IC, I'm saying that since they're already there for other reasons, and they do do the job, that is $xx worth of IC components that we can exclude from Sony's BD layout when determining the cost of inclusion in PS3.

And so basically if we go with that $85 figure, then Cell and RSX are saving Sony roughly $85 on IC costs.

[expletive]

Originally Posted by randycat99

So you are suggesting a standalone player that contains a version of Cell will w/o a doubt be the full blown PS3 version + RSX chipset? You really think that is necessary for a standalone player? This is the foundation of your argument?

Xboxdestroyas point was that yes even though the PS3 has a BR drive in it, the Cell and RSx would offset some of that because they would take the place of dedicated ICs to do decoding, scaling, etc. I was pointing out to him that the Cell/RSX is actually MORE expensive then dedicated ICs so the Cell/RSX combo doesnt offset anything when youre trying to use these players' BOM as a gauge for the cost of the PS3.

EDIT: xboxdestroya- Ok then i misunderstood, so the original argument is that whatever the BOM is of these standalone players, you would have to just 'tack that on' to hte BOM of the PS3, inclusive of everything else it needs? I didnt get that from Natoma's post but ok, i do disagree with that.

EDIT EDIT: In that case with a BOM of about $400, i put the drive at about half of it, knowing what we know about the dedicated ICs.

[Carl B]

Originally Posted by expletive

EDIT: xboxdestroya- Ok then i misunderstood, so the original argument is that whatever the BOM is of these standalone players, you would have to just 'tack that on' to hte BOM of the PS3, inclusive of everything else it needs? I didnt get that from Natoma's post but ok, i do disagree with that.

EDIT EDIT: In that case with a BOM of about $400, i put the drive at about half of it, knowing what we know about the dedicated ICs.

Exactly, that's what I'm saying. Now using your figures as reference, I'm not sure if we get as low as $200 or anything, but hopefully a couple of months from now when volume shipments of standalone players have begun, additional supply will come on the market in terms of diodes and OPUs and BD inclusion in PS3 won't be too brutal cost-wise for Sony. I mean again, it'll likely still cost more than any other one component though.

I see it like this in terms of BOM, with bolded items under the BDplayer as being the items PS3 would need for it's own BD capabilities:

PS3:

Cell
RSX
MoBo
RAM
Casing
I/O
HDD(?)

BD Player:

Casing
I/O
MoBo
Dedicated ICs
motor
diode
OPU

[expletive]

Originally Posted by xbdestroya

Exactly, that's what I'm saying. Now using your figures as reference, I'm not sure if we get as low as $200 or anything, but hopefully a couple of months from now when volume shipments of standalone players have begun, additional supply will come on the market in terms of diodes and OPUs and BD inclusion in PS3 won't be too brutal cost-wise for Sony. I mean again, it'll likely still cost more than any other one component though.

I see it like this in terms of BOM, with bolded items under the BDplayer as being the items PS3 would need for it's own BD capabilities:

PS3:

Cell
RSX
MoBo
RAM
Casing
I/O
HDD(?)

BD Player:

Casing
I/O
MoBo
Dedicated ICs
motor
diode
OPU

Yeah i agree. Even at $200 (youre right though its probably closer to $250) for the drive its a huge cost difference from the $25 DVD drive in the Rev and 360. Sony is probably paying close to that much in codecs, HDMI hardware and licensing alone. At this point $599 would not surprise me at all.

[Carl B]

Originally Posted by expletive

Yeah i agree. Even at $200 (youre right though its probably closer to $250) for the drive its a huge cost difference from the $25 DVD drive in the Rev and 360. Sony is probably paying close to that much in codecs, HDMI hardware and licensing alone. At this point $599 would not surprise me at all.

Honestly I'd be shocked if MS or Nintendo were paying that much for the DVD drive, but that's a side topic I guess. Anyway for PS3 I'm still guesstimating at $450 - in fact I feel pretty good about it after my 'crazy math' post from a while back.

BUT, that being said I wouldn't be surprised by $299, $499, $599, or anything else.

We'll see what happens ultimately; truthfully I don't think Sony knows yet what they're going to sell it for, and they'll obviously wait a couple of months to see what their own component prices look to be during the launch period and projected thereafter before they reach that decision.

Hopefully for both Sony and the consumer, the Blu-ray components fall in cost in between now and then.

[randycat99]

I don't wish to see an overly pricey PS3 anymore than the next guy, but if Sony decides to start out fairly exhorbitant and still sells out at launch, I can only congratulate them on a launch well played (especially compared to their nearest competitor). Their industry clout and userbase fanfare has never been greater, so who is to honestly say they are unwise to call in on some well and fairly earned chips, from a business standpoint?

I still believe claims of premium priced BR components remain gratuitously overrated.

[DemoCoder]

Sigma makes an IC/SOC for HD-DVD and BluRay and they regularly post to AVSForum claiming their chips cost <$50 in bulk. You do not need a hugely expensive GPU and CPU to make an HD-DVD or BluRay player.

[Carl B]

Originally Posted by DemoCoder

Sigma makes an IC/SOC for HD-DVD and BluRay and they regularly post to AVSForum claiming their chips cost <$50 in bulk. You do not need a hugely expensive GPU and CPU to make an HD-DVD or BluRay player.

Demo you've read this thread right? 'Cuz nobody's saying otherwise.

[scooby_dooby]

either way that is one expensive drive man, WAAAAY higher than many here were predicting. Standalone's actually cost ~$320 without IC costs? What's so expensive?

OPU?

This article does make it sound like the information about HD-DVD being signifigantly cheaper was total FUD, but then, is Toshiba just taking a huge hit on their $500 hd-dvd player ?

also: this is a sign that ML was basically dead on with their $300 prediction for BR in PS3... go figure

[Carl B]

I think it seriously comes down to what Randycat said in post #5 of this thread.

Just because our own analysis of someone else's analysis then comes in line with another prior analysis, it doesn't mean any and/or all of us aren't mistaken.

Anyway I do think that ultimately Blu-ray in PS3 won't be as high as $300; all we can hope is that one day we get a real read on the figures, if for our curiosity alone.

[Titanio]

Originally Posted by Natoma

Maybe that 400-500 Euro/$500-$600 USD price that was quoted wasn't so far fetched?

Of course it's not, but not necessarily because standalones cost X to produce. How much did you expect PS3 to retail at - $300?

[one]

BTW, the first HD DVD player HD-XA1 contains Mobile Pentium 4 2.5GHz though it was previously believed that it'd use Celeron, so it's almost a mini-PC.

http://www.watch.impress.co.jp/av/do...407/hddvd2.htm
http://www.watch.impress.co.jp/av/do...407/hd2b06.jpg

[SPM]

I am no expert at this, but from what I have read, Blu-ray should not intrinsically be any more expensive than DVD. The reason it is more expensive now is due to the initial investment/re-tooling required for manufacture (which has already been invested for DVD), the shortage in supply, and the lack of cut throat competition between manufacturers unlike DVD.

[Platon]

Originally Posted by SPM

I am no expert at this, but from what I have read, Blu-ray should not intrinsically be any more expensive than DVD. The reason it is more expensive now is due to the initial investment/re-tooling required for manufacture (which has already been invested for DVD), the shortage in supply, and the lack of cut throat competition between manufacturers unlike DVD.

Yes, but here they are talking about the BR readers, not the discs...

[expletive]

Originally Posted by randycat99

I don't wish to see an overly pricey PS3 anymore than the next guy, but if Sony decides to start out fairly exhorbitant and still sells out at launch, I can only congratulate them on a launch well played (especially compared to their nearest competitor). Their industry clout and userbase fanfare has never been greater, so who is to honestly say they are unwise to call in on some well and fairly earned chips, from a business standpoint?

I still believe claims of premium priced BR components remain gratuitously overrated.

Oh i agree but i think the argument has always been the race to $149. These companies (except Nintendo) will alwys be losing money early on but how long before they can realistically sell the thing for $149, or even $99? The question is if Sony wants to lose money on the hardware throughout its life. If they feel their business model supports it then thats fine, i'll reap the benefit of that buy getting $600 worth of kit for $299. However, if they cant or dont want to lose money on the hardware for every long, the competition should be able to have a significant cost advantage..

I kow there will be replies on the fact that theyre willing to do this because they make money on the software and BR movie sales. Just to put it in context...

Due to market competition, figure that Sony will sell at a loss for a good part of its lifespan, lets say on average they lose 100 per unit over the next 5 years (figuring more at the beginning but less at the end, averaging $100)? With that, if they sell 80 million units, thats 8,000,000,000 lost over its lifespan. EIGHT BILLION. Can Sony really afford to lose that much over the next 5 years? Thats 1.6 billion in losses per year. Forget the games and the demos, this it the biggest piece of info we should be interested in because of its long term ramifications on the market.

This becomes irrelevant if market competition does not drive them to match the prices of their competition, but to compete in the console space i would think they have to no?

[Carl B]

Originally Posted by expletive

Due to market competition, figure that Sony will sell at a loss for a good part of its lifespan, lets say on average they lose 100 per unit over the next 5 years (figuring more at the beginning but less at the end, averaging $100)? With that, if they sell 80 million units, thats 8,000,000,000 lost over its lifespan. EIGHT BILLION. Can Sony really afford to lose that much over the next 5 years? Thats 1.6 billion in losses per year. Forget the games and the demos, this it the biggest piece of info we should be interested in because of its long term ramifications on the market.

Well, I think that the PS3 hardware itself will probably be sold at a profit after ~two years or so though. I figure initial losses will be steep-ish, but as 65nm comes on and BD costs start to plummet - and I mean the costswill start to plummet at some point - PS3 will take it's place among previous profitable Sony consoles.

[scooby_dooby]

Originally Posted by xbdestroya

I think it seriously comes down to what Randycat said in post #5 of this thread.

Just because our own analysis of someone else's analysis then comes in line with another prior analysis, it doesn't mean any and/or all of us aren't mistaken.

Anyway I do think that ultimately Blu-ray in PS3 won't be as high as $300; all we can hope is that one day we get a real read on the figures, if for our curiosity alone.

No it doesn't mean anything, but it is a sign that the estimates were more inline with reality than we gave ML credit for. After all, you said it yourself, these guys specialize in pricing hardware, the fact that they came out with roughly the exact same cost is interesting at the very least.

[Carl B]

Originally Posted by scooby_dooby

No it doesn't mean anything, but it is a sign that the estimates were more inline with reality than we gave ML credit for. After all, you said it yourself, these guys specialize in pricing hardware, the fact that they came out with roughly the exact same cost is interesting at the very least.

Well, I grant you that - it is interesting. The prices only line up though were Sony to be sourcing their parts today in the here and now. So M-L still has plenty of chances to overshoot on their BOM/BD estimate.