Blu-ray player builds to cost $50 by 2010

Good news for people waiting to buy into Blu-ray: Production costs will reportedly be cut in half over the next year.

Industry sources told DigiTimes (pay wall) that the cost to make a Blu-ray player will fall from the current $100 to roughly $50 in 2010.

Two components in a Blu-ray player, the pick-up head and the chipset, account for 50 percent and 25 percent of manufacturing costs, respectively. The sources said more manufacturers than ever are supplying these parts, and production yields are increasing, driving down the total cost of a player.

It goes without saying that when manufacturing costs come down, retail prices follow. This news provides more evidence that $100 Blu-ray players will be on tap for this holiday season. In April, Blu-ray.com reported that Chinese manufacturers are entering the market, and quoted a Samsung marketing executive as saying a $99 Blu-ray player will follow. The same article says major manufacturers such as Sony and Panasonic won’t sell their players so cheaply, leaving the entry-level market to Sylvania and Magnavox.

But if production costs fall drastically, those big companies won’t be risking slim profit margins just to compete with the new Chinese manufacturers. They’ll have more reason to cut their prices if the cost of parts themselves fall as sharply as reported. And who knows, maybe we’ll get that Playstation 3 price cut after all.