CE manufacturers will sell any product that will net them their required return.
There is a reason
why no CE manufacturers offer OTA HD DVRs without a monthly fee. Demand is low and most consumers won't pay what CE manufacturers would have to charge to realize an acceptable return after accounting for software R&D, hardware R&D, support / warrantee costs, and distribution / retail margins.
Limited demand for a product translates into fewer units manufactured and sold, hence fewer units over which to amortize R&D and fixed manufacturing costs. Smaller production runs also translate into higher component pricing.
If a company like Sony sold the TivoHD hardware with their own software, they would probably have to charge $600+ to realize any kind of acceptable return. Tivo Series3 owners already paid for most of the initial TivoHD software R&D, and at $299, Tivo expects to lose money on retail sales and break even overall, after accounting for direct (Tivo.com) sales. The profit will be generated from the monthly fee, but not all of it; according to Tivo's balance sheet, almost 60% of the monthly fee is spent on guide data delivery, ongoing service and support costs, and software updates, and the rest goes to the bottom line.
Originally Posted by tuna-head
I'd say it could be done for $200.
The individual components might cost $150 or $200 when purchased in quantity. But you could say the same thing for many $1500-$2000 TVs. The bill of materials is only a small fraction of the price of most retail CE products.