My 2ยข, which is mostly from info that drifts my way and guessing, says late 2006 for Japan at the earliest. Why?
For starters, Sony typically is a bit noisier in their promotion of the finished product when it's only months away. Sure, Sony is likely being quieter than usual right now, but there have been reports of Sony's third parties facing financial risks and losses because even they don't know when the PS3 will ship, or in what numbers. It's kind of hard to base sales figures of your 8 figure game when you don't know that much.
Retailers also need several months between when they find out exactly what they can order for their stock, and how many to order, and the time it actually hits their retail outlets. Factor in the typical delay between when Sony releases in Japan and when they release in the US, and a US Fall 2006 launch seems remote, at best. That is, unless they repeat MS's tactic of a global launch at year-end to get the '06 holiday sales, and face the lack of stock that goes with it.
But wait, there's more! Didn't we recently see the first demoes of the first high definition DVD players a little over a month back? The cheapest self-contained Blu-Ray player was $1,000, by a Sony third party. If Sony were to release a direct competitor to that player, which could also play the latest console video games, at half the price, don't you think that Sony third party would be more than a little pissed off?
Sony is currently the main player in this industry, commanding a rather large lead in sales and support over MS. In the coming months, we'll likely see the normal Sony tactics of overblown specs, with images of games in development, and a first glance at actual hardware instead of "artists conceptions", of such hardware as the console casing. Sony is likely banking on that lead to carry them through.
The actual launch hardware, and this is again 100% guesswork, might not have as many things bundled in with the console itself as what's currently believed. The cell processor, and the graphics card, and the Blu-Ray drive won't be cheap, and even subsidizing those costs with losses of hundreds of dollars per console may not cover it. In fact, I can picture the PS3 launch as being similar to the 360 Core system launch. The HDD will be a seperate component, and wireless controllers will be available as an extra, with wired controllers being the standard. Blu-Ray games will be playable, but the BIOS may be set up to not allow Blu-Ray movie playback without the purchase of an additional dongle, much like DVD playback with the first XBox.
And if you want those extras? Well, you'd have to purchase them from Sony and from Sony's licensed partners. And the approach may be a quasi-repeat of the movie playback which was build into the PSP, which Sony also sold initially at a loss of hundreds of dollars. In the same way that you had to pay $30 to watch a stripped down version of a $20 DVD movie on your PSP, I'm guessing that they'll sell the "missing" PS3 peripherals at a much higher cost than they cost to manufacture.
And if Halo 3 isn't ready by then, or even if it is, expect MS to counter with a price drop for the 360. It wouldn't surprise me if, as far as sales ratios go, we see a repeat of the Genesis/SNES days with the two leads trading the <2% sales lead a few times per year. And if Nintendo's gamble on their new styled controller and their retro library doesn't pan out, they'll be the next TurboGrafx.