[url=http://www.tmcnet.com/usubmit/2006/jan/1264661.htm]Tokyo finds big trouble in China[/url] said:
Companies like Sony and Matsushita (Panasonic), which foot the huge R&D bill for technologies like DVD, have historically recouped their costs in the early years of consumer adoption, when devices made in their own factories could retail with a high profit margin.
[...]
Toshiba, which is preparing the HD DVD format to battle Sony and Matsushita's Blu-ray Disc this year, reportedly is having its HD DVD players made in China right off the bat, so they can carry a price advantage at retail.