Ps3 price cut all but confirmed before xmas .

[rocketpig]

FishyJoe said:
The problem with cutting prices every time you have cost reduction is you make your product a commodity, like Dell. The consumer will expect you to constantly reduce prices and your profit margins will always remain thin.

Contrast that with making your product desirable at the pricepoint you define, like Apple. Your profit margins stay healthy and allows you to define the marketplace, not be a slave to it.

That works when you're a niche market like Apple. When you're competing in a broader market (think Dell vs. HP vs. Gateway) and when you rely on third parties to make a platform viable, you can't paint yourself into a corner with non-competitive pricing or hardware. Look at what happened to Gateway.

Look at Apple's marketshare. It was down to 3% for years. It currently sits around 5% last I checked, but that's still nothing in the grand scheme of things. Apple is dominating right now because of its non-Mac equipment. Macs aren't hugely profitable for them at all.