While speaking to investors, Lazard Capital says a price cut on Xbox 360 hardware is "unlikely in early 2007." However, they do believe a price reduction could come by the end of the year depending, of course, on the "competitive landscape." As a refresher, here's how Microsoft historically dropped the price of the original Xbox according to Wikipedia:
$299 (November 15, 2001, Launch Price)
$199 (May 15, 2002)
$179 (May 14, 2003)
$149 (March 29, 2004)
The first drop came only six months after the console's initial release. But remember, this was the time Microsoft had gotten into the console game so very aggressive pricing is understandable. The second drop came a full year later, followed by 10 months to bring us to the current MSRP of $150. So can we expect a first 360 price drop this year? Perhaps. That all depends on the "competitive landscape," namely what Sony and Nintendo have up their pricing sleeves.