El Segundo (CA) – The first generation of HD DVD players are priced 50% below their Blu-ray rivals. While it is no secret that the HD DVD camp is using a lower price to make up for feature disadvantages, a market research firm today reported that Toshiba in fact is taking a loss: The actual cost of the device may be 40% higher than the retail price…

According to Isuppli, the bill of material (BOM) for Toshiba’s HD-A1 clearly exceeds its $500 U.S. retail price. The market research firm estimates the player’s material cost at $674, which excludes costs for manufacturing, testing, cables, remote control and packaging. Those additional costs could easily push the total cost of the HD-A1 to more than $700 per unit, Isuppli said.

“The Toshiba HD-A1 is basically a combination of a low-end PC and a high-end DVD player,” noted Andrew Rassweiler, and senior analyst at Isuppli. At its core there is an Intel Pentium 4 processor whose cost is estimated at $119; Broadcom video decoding and Analog Devices DSP add $18. The HD-A1 also uses $125 worth of memory, including a 1 GB DIMM from Hynix and three other types of DRAM, a 256 MB flash memory disk from M-Systems and 32 MB of Mirrorbit flash memory from Spansion – bringing the integrated circuit cost and processors to about $366.

Then add HD DVD drive at about $200 as well as necessary electro-mechanical, mechanical passive and discrete semiconductor devices – for an estimated BOM total of just under $674 – and include manufacturing, packaging, shipping and marketing (which typically adds another 20% to the cost) and you end up with a cost that is well above $700 and may be even touching $800…

France-based Thomson launched its first HD DVD player under the RCA brand. The HDV5000 is currently available in U.S. retail and etail for about $500. The feature set reflects the specifications of Toshiba’s HD DVD player and include 720p/1080i capability, up-conversion of current DVDs, 5.1 channel surround sound (Dolby Digital and DTS), as well as support for DVD-Video, audio CDs, DVD+R/RW, DVD-R/RW, and CD-R/RW media….

According to an article published by IDGNS, Kim Du-Hyon, an assistant manager in Samsung’s home-platform product planning division, reacted to rumors about Blu-ray/HD DVD players that have been making rounds on the Internet for several months. “We don’t have a plan to make an HD DVD-only player but are considering a universal player,” he said. “We are preparing HD DVD [support] now and if we launch a universal player it will be the end of this year or early next year,” Du-Hyon is quoted by IDGNS….


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