Add up the numbers in the column. It only adds to $800.
This report is way way off.
Additionally:
The only thing worse here than M-L's estimate of the price of the PS3 this year is their estimate of it in 3 years.
Let's start from this year.
$230 seems high for just the CPU. I couldn't say how much, but I can say that Sony wouldn't even bother to make their console if the CPU cost half over half of the expected selling price.
The Blu-Ray drive price is WAY too high. Philips is going to ship a Blu-Ray writer drive for $500 in May. That's $500, retail. That includes retail markup, and cost of shipping to retailer. Also, Philips pays Blu-Ray license fees to produce units and Sony doesn't. And did I mention the Philips writes and the PS3 only has to read? And I can buy a quality DVD-Writer for under $40 retail right now. A Blu-Ray reader drive is a little different, but not a lot. It cannot cost much over $100, and it'll be well below that by fall, when the PS3 production ramps up (or perhaps just begins in earnest, I dunno).
6 USB ports? It will not have that many. 4 tops (2 front, 2 back). And the connector cost seems high, I'd say $3 today for USB ports, maybe $2.
For 802.11g and ethernet, Sony is using IP from Marvell that is normally used as an 802.11 access point. So it has all 3 ethernet ports and the 802.11g (and an ethernet hub) in a single chip (or less, see below). I'd say $5 for the ethernet and 802.11g together, maybe a bit more if they really leave 3 connectors on the back.
If the $100 was for a hard drive, they're the dumbest people alive. I can get a 40GB 2.5" drive for well under $100 retail. The OEM price cannot be over $50, and they could always go to under 40GB if it saves money. I'll just assume they added wrong.
I think also M-L doesn't understand that when you make a custom chip you can put a lot of stuff on it. The link (brains) for the USB, 802.11 and ethernet are probably on the main chip in the unit, bringing the cost of them down to nearly free. The 802.11 PHY/radio will probably be a separate chip, but the USB PHY is certainly on board, maybe the gigE one too.
So M-L is well over the initial price here.
Now, let's look at the future prices.
$100 for an OEM Blu-Ray reader in 3 years? Unpossible. Blu-Ray would have to be the biggest flop in the world for this to happen. My guess is you'll be able to buy a Blu-Ray writer drive for less than $60 in 3 years at retail. Look at how DVD writer prices collapsed. Readers will probably be under $40 retail. OEM prices for either will be even lower. And again, Sony doesn't have to pay license fees, so that lowers their prices even further.
$60 for the main chip in 3 years seem high too. It'll be on 65nm or lower then, yields will be way up, chip size down, and they might even combine chips (like the GS and EE were combined into a single chip on PS2 in under 3 years). I couldn't say how high though. Maybe it'll be $50, but include the functions of some of the other chips in it.
$30 for 512MB of RAM 3 years from now. Seriously? That's way off. GDDR3 will not be special anymore, and Sony won't be paying much premium for XDR, since they'll have enough volume to make a market in it. Right now you can get 32M of mobile SDRAM for $4 in big quantities, 64M of mobile SDRAM for $5. And I'm to think 512MB of commodity RAM will be $30 in 3 years? Nope.
Again, they don't know the PS3 uses a single set of IP for Ethernet and WiFi, $7 between the two 3 years from now is way too high. I'd say $2 for the PHYs, links will certainly be on with another chip.
$5 for Bluetooth in 3 years? It won't drop at all? Smooth move.
These companies stink at estimating parts costs. Just remember, these are stock brokers, not engineers, not parts buyers. They just don't have any clue at all.
Philips co-invented the CD with Sony and got royalties from that. They did not get money from DVD, Sony did that without them. My understanding is that Philips (founder or not) didn't co-invent BluRay and gets no fees from it either. Thus, they would pay license fees to produce drives, just like the other founders who don't hold the patents would.
Do you happen to see a cost listed on that rather short list for the shell of the PS3? How about a cost for the interior housing? Screws? Maybe a cost for the included Duo Stick reader? No? How about a cost for the included controller, surely that would be there? Not there either? How about cost for packaging? The included demo disk? Power cord maybe? Manuals? Not there either huh? Hmmm lets think about this then. If we total up the cost of what isn't listed there, we'd get about $100 to perhap
The 2nd column (cost of items in 3 years) adds up perfectly. So your theory is wrong unless you think all that stuff is free 3 years from now. Your moron comment doesn't work. I think the $80 listed at the bottom is supposed to cover all that stuff. Honestly, it seems like it could be low to me. Not that memory stick Duos cost anything (I can get 1GB for $40 retail right now, the 128MB Sony gives out won't be more than $7 wholesale) but the power supply plus controller could add up to $50 alone. And as you s
Yes, the costs for the cables/manuals/a port or two, a demo disk (mass produced disks cost less then pennies to physically produce and not much time/money needed to put a demo disk together to matter when your talking about 1 million+ ps3's in the first few months) == $100. I'll bet the cost of all of those things together will be less then $25 bucks. Remember, while sony and other game manufacturers charge an arm and a leg for extra controllers/accessories, it's due to their giant margin on those products.
Don't ask me if the analyses that have been suggested are right, but I must say, M-L has been given a gift in the way that the different aspects of the report have been criticized (and corrected?) by slashdot-ers. If I'm trying to predict the future, I might as well see if I can get a report noticed by slashdot. On the other hand, the reports author, Joe Osha, is fairly well respected in his area of financial analysis, semi-conductor companies. But if you look at his old quotes [thinkexist.com], he's taken it in the shor
The part after "aditionally" is blatantly cut/pasted from the Engadget discussion on the same topic found at http://www.engadget.com/2006/02/18/playstation-3-c osts-900-sez-merrill-lynch-mob/#c1063780 [engadget.com]. Unless this person happens to be the poster of the comment on Engadget (and he didn't bother to direct people to it), it should be modded down even though he makes a great point.
"$230 seems high for just the CPU. " Custom CPU on a pretty limited scale*? no, it doesn't.
"I think also M-L doesn't understand that when you make a custom chip you can put a lot of stuff on it. The link (brains) for the USB, 802.11 and ethernet are probably on the main chip in the unit, bringing the cost of them down to nearly free."
because doing that doesn't cost anything. oh wait, it does cost money. Money for design, increased fab costs. increased risk of errors on the silicon, etc . ..
well, I could pic
Seen on a button at an SF Convention:
Veteran of the Bermuda Triangle Expeditionary Force. 1990-1951.
for starters, that column doesn't even add up... (Score:3, Interesting)
This report is way way off.
Additionally:
The only thing worse here than M-L's estimate of the price of the PS3 this year is their estimate of it in 3 years.
Let's start from this year.
$230 seems high for just the CPU. I couldn't say how much, but I can say that Sony wouldn't even bother to make their console if the CPU cost half over half of the expected selling price.
The Blu-Ray drive price is WAY too high. Philips is going to ship a Blu-Ray writer drive for $500 in May. That's $500, retail. That includes retail markup, and cost of shipping to retailer. Also, Philips pays Blu-Ray license fees to produce units and Sony doesn't. And did I mention the Philips writes and the PS3 only has to read? And I can buy a quality DVD-Writer for under $40 retail right now. A Blu-Ray reader drive is a little different, but not a lot. It cannot cost much over $100, and it'll be well below that by fall, when the PS3 production ramps up (or perhaps just begins in earnest, I dunno).
6 USB ports? It will not have that many. 4 tops (2 front, 2 back). And the connector cost seems high, I'd say $3 today for USB ports, maybe $2.
For 802.11g and ethernet, Sony is using IP from Marvell that is normally used as an 802.11 access point. So it has all 3 ethernet ports and the 802.11g (and an ethernet hub) in a single chip (or less, see below). I'd say $5 for the ethernet and 802.11g together, maybe a bit more if they really leave 3 connectors on the back.
If the $100 was for a hard drive, they're the dumbest people alive. I can get a 40GB 2.5" drive for well under $100 retail. The OEM price cannot be over $50, and they could always go to under 40GB if it saves money. I'll just assume they added wrong.
I think also M-L doesn't understand that when you make a custom chip you can put a lot of stuff on it. The link (brains) for the USB, 802.11 and ethernet are probably on the main chip in the unit, bringing the cost of them down to nearly free. The 802.11 PHY/radio will probably be a separate chip, but the USB PHY is certainly on board, maybe the gigE one too.
So M-L is well over the initial price here.
Now, let's look at the future prices.
$100 for an OEM Blu-Ray reader in 3 years? Unpossible. Blu-Ray would have to be the biggest flop in the world for this to happen. My guess is you'll be able to buy a Blu-Ray writer drive for less than $60 in 3 years at retail. Look at how DVD writer prices collapsed. Readers will probably be under $40 retail. OEM prices for either will be even lower. And again, Sony doesn't have to pay license fees, so that lowers their prices even further.
$60 for the main chip in 3 years seem high too. It'll be on 65nm or lower then, yields will be way up, chip size down, and they might even combine chips (like the GS and EE were combined into a single chip on PS2 in under 3 years). I couldn't say how high though. Maybe it'll be $50, but include the functions of some of the other chips in it.
$30 for 512MB of RAM 3 years from now. Seriously? That's way off. GDDR3 will not be special anymore, and Sony won't be paying much premium for XDR, since they'll have enough volume to make a market in it. Right now you can get 32M of mobile SDRAM for $4 in big quantities, 64M of mobile SDRAM for $5. And I'm to think 512MB of commodity RAM will be $30 in 3 years? Nope.
Again, they don't know the PS3 uses a single set of IP for Ethernet and WiFi, $7 between the two 3 years from now is way too high. I'd say $2 for the PHYs, links will certainly be on with another chip.
$5 for Bluetooth in 3 years? It won't drop at all? Smooth move.
These companies stink at estimating parts costs. Just remember, these are stock brokers, not engineers, not parts buyers. They just don't have any clue at all.
Philips wasn't in DVD... (Score:2)
I could be wrong, but that is my understanding.
Its called an estimate for the total cost (Score:1)
did you add up the 2nd column? (Score:2)
I think the $80 listed at the bottom is supposed to cover all that stuff. Honestly, it seems like it could be low to me. Not that memory stick Duos cost anything (I can get 1GB for $40 retail right now, the 128MB Sony gives out won't be more than $7 wholesale) but the power supply plus controller could add up to $50 alone. And as you s
Heh (Score:2)
I'll bet the cost of all of those things together will be less then $25 bucks. Remember, while sony and other game manufacturers charge an arm and a leg for extra controllers/accessories, it's due to their giant margin on those products.
God I need sleep (Score:2)
Re:for starters, that column doesn't even add up.. (Score:1)
Mod Parent Down! (Score:3, Informative)
I am (Score:3, Informative)
Oops (Score:1)
Sorry for the misunderstanding.
Re:for starters, that column doesn't even add up.. (Score:2)
Custom CPU on a pretty limited scale*? no, it doesn't.
"I think also M-L doesn't understand that when you make a custom chip you can put a lot of stuff on it. The link (brains) for the USB, 802.11 and ethernet are probably on the main chip in the unit, bringing the cost of them down to nearly free."
because doing that doesn't cost anything. oh wait, it does cost money. Money for design, increased fab costs. increased risk of errors on the silicon, etc . .
well, I could pic