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I think your analyst is way off and is thinking from the last era. As Apple has proven - it's much better to grab a small piece but the most lucrative and profitable part of the pie, rather than fight for the biggest share but the no profit part
That's cool - I respect your differing viewpoint.
But I'm not talking about "no profit".
Do you really believe Sony were struggling to make a healthy profit with the ZX1?
ZX2 doesn't need to be any more expensive than the ZX1, for Sony to make a fair profit.
Sony's aiming for that lucrative part here, and they are probably expecting the bottom feed is going to be mopped up by Chinese OEMs once the market grows bigger and attractive. They've also learnt that lesson the very hard way with their mobile division with Android, or actually the past decade with their electronics when they lowered the TVs to match the Koreans and lost.
The $600-$700 I proposed is hardly 'bottom feed'.
There's that saying that only a fool would repeat the same experiment expecting the same results. Sony's messed up enough in the past under Stringer in which they were going for marketshare and sacrificing quality enough times that they are now in the red, and they aren't going to try the same thing this time. Their direction is actually the correct one here, the ZX2 might be just testing the waters to see what the ceiling is for the market they are shooting for.
I never said anything whatsoever about sacrificing quality, in this ZX2 discussion.
I agree that Sony should not sacrifice quality. I have witnessed Bosch sacrifice quality, in their power tools division, the past few years, and their reputation has suffered badly because of it, and rightly-so.
Sony do not need to sacrifice quality in order to make a profit at a reasonable retail price. Greedily maximising profit margins, for the benefit of the company, at the expense of the customers, is, perversely, at the longterm expense of the company, too. It's just that it may take a few years for the results of poisonous business practice to manifest themselves tangibly. It's somewhat analogous to modern farming practice, where farmers seek to maximise profit from the land, by greedily extracting every last ounce of yield from the soil, without giving any thought to the natural balance that the land requires. It is highly-profitable, short-term, so it seems to be the most successful way of doing business, but eventually the approach will crash, catastrophically. This approach began by 'testing the waters', too, and very soon we will witness a global catastrophe in food production.
There is a middle-ground of profitability which is where I am suggesting Sony should be aiming their DAP efforts. Sony have a huge manufacturing and resources advantage over smaller boutique DAP makers, but in focusing too much attention on enlarging their profit margins, they're overlooking a potentially greater level of success in the DAP marketplace. My point is that Sony is capable of producing a top-quality DAP at a cheaper manufacturing cost than some of their competitors, whilst selling it at a slightly higher price, thus achieving a bigger profit than those disadvantaged smaller competitors, but still selling in decent numbers because of not being too greedy.