It's balancing act, if you don't look at it in a vacuum. Lower costs/Lower Profit per unit. -> Lower unit prices -> Higher demand -> Higher volume -> Higher overall profits
Of course this assumes you can meet the demand. Japanese companies have in the past valued market penetration over higher profits. That's why Canon will "give" away High cost equipment to gain market share. Smaller companies have to have lower profit margins to get the same effect, which of course leads to lower marginal profits. As long as marginal profits aren't negative Pentax thought they were doing well. That was a more or less traditional view. Tom C wrote: >> On 23/05/07, John Forbes <[EMAIL PROTECTED]> wrote: >> >> >>> It would appear that Pentax is selling more K10Ds than it expected. >>> >> That >> >>> suggests lower unit costs, and more profit. Lower prices, I grant, mean >>> less profit. But since this division is making much more money than it >>> did, it suggests that the effect of the former is outweighing the effect >>> of the latter. >>> >> LOL, really ;-) >> >> -- >> Rob Studdert >> > > Yes and the fact that Pentax and Hoya are going to merge means that Pentax > was in spit and polish condtions, ship-shape financially speaking, before > embarking down this path. > > Lower Unit costs = Lower selling price = Less profit = Making much more > money than it did > > What's wrong with this picture? > > Tom C. > > > > -- All dogs have four legs; my cat has four legs. Therefore, my cat is a dog. -- PDML Pentax-Discuss Mail List [email protected] http://pdml.net/mailman/listinfo/pdml_pdml.net
