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Cost-reduced chips definitely have a major impact. I know that the original HD TiVo, the TiVo Series 3, sold for $800 when it came out in 2006, and only dipped below $500 when it finally was being cleared out of inventories. By comparison, the follow-on TiVo HD, which was in most ways simply a cost-reduced version of the TiVo S3, started at $400 and have come down to $250. The TiVo S3 was priced based on cost, because it was so costly. As a result, it sold for a price higher than most reasonable people would think was fair. The TiVo HD is selling roughly at cost, and with the requirement for purchasing service for the device, presumable selling at a profit, getting TiVo closer to pricing based on value, which is better for TiVo.