Nikki Baird

Samsung Launches One Company Price War in 3-D TVs

September 2, 2010

FROM RETAILWIRE:
By its own estimate, Samsung has grabbed an 88 percent share of the emerging 3-D TV market in the U.S. There should be time for others to give Samsung a run for its money, but that may not be so. Will Samsung's pricing strategy dramatically move up the timetable for adoption of 3-D technology in American households?      [more...]

This seems to be the consumer electronics pricing model of the future: get out early with something, even if it's at a ridiculously high price. See how quickly you can ramp up volume and drop prices, with the aim of making most of your money in the early days of a product, so that you can give up margin down the road--and lock out other manufacturers that are early on the production/price curve. If a competitor can't ramp its production without the support of high-margin selling, then they'll never catch up.

It seems like Apple has done this quite well, and even the eReader price wars smell of this strategy--Amazon had a long time to sell the Kindle at, basically, full price, before having to deal with real competition. Now that the competition is out, Amazon is sucking all the margin out of the reader by drastically dropping their price.

I guess it really does pay to be bleeding edge when it comes to rolling out CE products....