Every $99 HD DVD Player Losing $500?

You might have heard about those $99 HD DVD players that were being sold for a moment at Walmart and Best Buy. You’re probably smart enough to realise that Toshiba isn’t making much scratch on these things, but for reference, the first HD-A1 HD DVD player, cost Toshiba $674 in parts alone (Says iSuppli, 2006). So are they losing ~$500 bucks on each player?

Within a calendar year, I very much doubt that it could have been price-optimized more than 30% (*number pulled out of thin air). Either way, it’s pretty clear that Toshiba is losing at least a few hundred dollars on this $99 deal for consumers, and maybe over $500 bucks including all costs. Is this sale desperation? Or have they moved on from the early-adopter battle field and straight into the Waterloo of mainstream buyers? Maybe it’s just a stunt, since most places sold out almost immediately. What better way to win the hearts and minds of cheap Americans than to hold an insane sale on a sliver of all of your inventory?

AU: I think it’s pretty obvious they’d be losing plenty of dough on these deals. If they weren’t, they wouldn’t be crazy sale prices. This kind of deal is more branding exercise than push for units in homes. Whether it works is the billion dollar question. -SB