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Are Blu-ray prices dropping faster than expected?

Blu-ray prices may drop by $100 soon. It seems a little faster than anticipated.

Customers aren't exactly flocking to Blu-ray players and that might be accelerating cost cuts.

Stan Glasgow, Sony Electronics president, told reporters in a press briefing in the East Coast on Friday that Blu-ray players should drop to $399 at holiday time, according to Twice Magazine. Right now, the players go for $499 and up. Meanwhile, Stan Glasgow, president of Sony Electronics told reporters in a briefing on the East Coastthat Blu-ray players should drop to $399 at holiday time, down from the current $499.

That seems to be a little lower than earlier predictions In September 2006, Glasgow said that the industry was about a year away from a rational price of Blu-ray players and he identified a rational as $499. In one sense, Glasgow was right. Blu-ray players did hit a rational $499 price around September, a year from when he spoke. (I think he has sources in the pricing department there.) But the next cuts are coming right on top of that.

Then, at the Consumer Electronics Show in January, Sony said that it would take up to three years from initial release for Blu-ray players to hit $299 or $399. Again, we're in a gray area. Blu-ray has been out for almost two years. Thus, it is hitting the $399 price point early, but it's still not at $299. In other words, the predictions are still on track, but you can argue that the price cuts are coming faster than the more optimistic predictions.

Blu-ray manufacturers have been signaling that they will get more aggressive this year. At CEATEC, Matsushita Electric Industrial's Kazuhiro Tsuga said that the Blu-ray group would cut prices and promote the product heavily. Ideally, the effort would mark the beginning of the end of the war between the two formats.

"The BD (Blu-ray disc) companies will try to do our best to promote Blu-ray?The studios want us to put money in to promote it," he said. "By the end of the year, you will see good products with very good promotion."

Tsuga's comments prompted a Toshiba, the biggest backer of HD DVD, exec to tell me: "Yes, the war will be one. By Toshiba. Ha ha!" It made his day.

Of course, HD DVD has had to cut prices too. Combined, fewer than 1 million HD DVD and Blu-ray players (not including game consoles) have been shipped worldwide, according to the Toshiba exec's estimates.

And let's not leave the Blu-ray HD DVD combo players out. The much heralded devices are gathering dust too. The problem? They cost more than buying two separate players. That's something that both the HD DVD and Blu-ray execs like to point out.