Videogame analyst superstar Michael Pachter expects there to be a price cut for the PlayStation 3 by the end of the year, and says that it might even come as early as this summer. GI.biz
"It is possible that Sony's cost of production for the PS3 has declined to the point that the company may consider a hardware price cut some time this summer, and we may see a price cut for the PS2 before the holidays."
As long as Sony's manufacturing costs have dropped to a reasonable rate, I'd heartily encourage Sony to drop the price of the PS3 as soon as possible. It's very clear that people desperately WANT a PS3, but just can't afford it. Dropping it to $500US and then marketing the hell out of the price drop would do wonders for their sales. Just look at what a 30 dollar price drop did for the PSP