Hon Hai Precision to manufacture cheaper PS3s!

[Maxell]

Sep 14, 2007

Hon Hai Precision Industry Co., Ltd., one of the world's largest manufacturers on electronic manufacturing service (EMS) basis, recently joined Sony's supply chain to deliver Play Station 3 (PS3) consoles, according to industry sources.

The sources noted that Sony has set a shipment goal of 10 million PS3 consoles for the first quarter of 2008.
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This means fierce competition in the global market for game consoles and will lead to a boom in the sector making consumer electronics.

Hon Hai Precision reported sales revenue of NT$100.3 billion in August. This was its first time to break the NT$100 billion mark, and the firm has become Taiwan's first single enterprise to exceed such a major milestone in single-month revenue. Such an achievement by Hon Hai Precision was due partly to a booming season boosting sales and partly to Sony's hot-selling Play Station 2 console.

Insiders in the sector said that Sony has cut the selling price of PS3 consoles, and, at the mean time, planned to launch low-price models, with ASUSTeK Computer Inc. and Hon Hai Precision to supply the models.

Since Sony launched PS3 consoles in the fourth quarter of last year, ASUSTeK has been Sony's sole supplier of the products. However, ASUSTeK hasn't profited from that as the selling price of the product is too high. As a result, somehow, the company saw its sale revenue sharply slip to NT$136.7 billion for the second quarter from NT$222.5 billion posted in the first quarter.

Institutional investors opined that Sony has been aggressively deploying further operations in the global market for game consoles, and therefore added Hon Hai Precision on its supplier list, attempting to compete against Nintendo and Microsoft, which have competing models of Wii and Xbox, respectively. Thus, it is inevitable to see ruthless underselling competition in the market.

On the other hand, ASUSTeK posted sales revenue of NT$51 billion in August, up 10% from NT$45.9 billion posted in July. But, aided by Sony's ongoing orders for game consoles, ASUSTeK is expected to post a 30% growth in sales revenue for September.

Noteworthy is that although losing its leading position to Nintendo in the competition between its PS3 and Nintendo's Wii, Sony still sees its PS2 consoles, which have been launched for seven years, remain hot-selling in the world. This will continue to drive up revenues for Hon Hai Precision and ASUSTeK for the second half of this year.

Accordingly, sales of PS2 consoles has amounted to 100 million units worldwide since the products' launch in 2000, with the shelf life of such products expected to last at least three to four years.

source & copyright: CENS

http://www.emsnow.com/npps/story.cfm?id=29107&pg=story