Wednesday, November 14th 2007

Wistron Quits on Xbox 360

Nov 14th, 2007 03:31 Discuss (8 Comments)

Wistron is reported to have phased out of Xbox 360 production and has ended its six year cooperation with Microsoft, according to DigiTimes. With Microsoft dropping its selling price of the Xbox 360 console earlier this year, it tried to push the profit pressure onto its three OEMs, Wistron (who accounted for 40% of shipments), Flextronics (40%) and Celestica (20%), by asking them to lower their OEM prices. Wistron decided to stop taking Xbox 360 orders at the end of the third quarter after trying to negotiate with Microsoft over a quarter long period. Flextronics has taken over the majority of the Xbox 360 orders, increasing its OEM production to over 60% of total shipments, while Celestica still remains as a second OEM. Sources at component makers commented that with Wistron giving up on the Xbox 360, not only can the company prevent lowering of its gross margin, which dropped to 5.49% in the third quarter, it will also benefit the company over its growth into different markets. Wistron declined the opportunity to comment on this report.

Source: DigiTimes

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8 Comments on Wistron Quits on Xbox 360

Wile E

Power User

Good. Somebody needs to stand up to MS. There's no sense in losing profits to please them.

3991vhtes

^ +1

F-22

Yea! Someone needs to stand up to Microsoft and prevent price-drops to the consumer! What pompus assholes!

...:confused:

Lowering their Gross Margin doesn't mean they're losing money. As long as there IS a margin, they're making a profit. The simple fact is, they have alternative high-margin companies/products with which to devote their resources, thus, maximizing their profits. It's not like they're taking a stab at MS.

Wile E

Power User

F-22Yea! Someone needs to stand up to Microsoft and prevent price-drops to the consumer! What pompus assholes!

...:confused:

Lowering their Gross Margin doesn't mean they're losing money. As long as there IS a margin, they're making a profit. The simple fact is, they have alternative high-margin companies/products with which to devote their resources, thus, maximizing their profits. It's not like they're taking a stab at MS.

Lowering profits doesn't mean taking a loss. I see no reason to bow to MS on this issue. Winstron didn't like the proposal MS came up with, so they quit making the consoles. Now Winstron can concentrate on more fruitful endeavors, and MS can look elsewhere to get the deal they are after. One less company for MS to bully around is how I see it. Besides, MS getting the consoles cheaper doesn't mean that will reflect in the prices the consumers pay.

F-22

Dude..... Wile E... Did you forget about the price drops on the 360? You and I now get a cheaper console... Not only do we get a cheaper 360, but Sony had to compete, so now they dropped their price. Microsoft is asking it's manufacts to lower their price... all of this benefits the consumer. Why are you justifying paying a higher price from microsoft if you think they're such a mean old bully? Don't you wanna 'stick it to the man'?

Wile E

Power User

F-22Dude..... Wile E... Did you forget about the price drops on the 360? You and I now get a cheaper console... Not only do we get a cheaper 360, but Sony had to compete, so now they dropped their price. Microsoft is asking it's manufacts to lower their price... all of this benefits the consumer. Why are you justifying paying a higher price from microsoft if you think they're such a mean old bully? Don't you wanna 'stick it to the man'?

Because I don't believe lowering the price for MS will let us see another price cut, it will only serve to expand MS's profit margins. They'll lower the price to increase sales when they see fit, regardless of what happens with their OEMs.

Ketxxx

Heedless Psychic

^True. I say good to see a company telling MS to stick it up their arse.

WhiteLotus

this is surely going to put pressue on the other two compines that are producing the units - maybe they will increase the price to Microsoft to cover there new found costs, this could be very bad for the consumer and be a step back for Microsoft.

Wistron Quits on Xbox 360

8 Comments on Wistron Quits on Xbox 360

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