PS3 Price Finally Dropping?

Why do you think it's a possibility that the PS3 will see a price cut this year? Remember what made it expensive? Blu-ray my friend...Blu-ray. But what is it with this technology that it costs so much to implement in the PS3? Everything comes down to the little diodes from which that nice stripe of blue-violet light emerges. GameDaily reports that as of April, Sony has established an industry-leading monthly production capacity of 1.7 million blue-violet laser diodes.

They now cost only 8 bucks to make each, which means that PS3 production costs will drop considerably and Wedbush Morgan Securities analyst Michael Pachter thinks the same:

"Yes, it means that Sony is definitely in a position to cut price. God knows whether they will, but lower costs usually lead to lower prices. The right question to ask is whether the full bill of materials is below $499, allowing them to cut price and still avoid losing money. I'm not competent to answer whether it is, but I am competent to say that when cost is below $499, we should look for a cut to that level."

"The point is that if they're ramping capacity to [5 million diodes], they probably are coming down the cost curve for MPEG chips, dedicated disc drive processors, and every other component. Hard to say for sure, but I'd guess that Sony could squeeze a hundred dollars out of its cost by mid-year, maybe more."

And now for the most pertinent observation I've seen since the first price issues for the PS3 started to arise: "The question is whether this gets them to breakeven at $599, or allows them to cut price." And since Sony ain't sayin' jack, we'll just have to hope for a price cut. But if nobody knows exactly how Sony stands, what could possibly make them to lower the price on the PS3? Common sense perhaps... Oh and the fact that it might just start selling some units.