Originally posted by ensan
If people here have been keeping their eyes on digital camera, they should be aware that Canon introduced a sub-1000 DSLR camera in Sep 2003 which was the first breaking the $1000 limit.
That camera has been since then selling like crazy as all other competitors were still selling DSLR for at least $1600. The result? Stock out everywhere. Not only the camera itself, but also Canon's luxury-series camera lenses which themselves are more expensive than the camera body!
Canon, by lowering the price of camera body, creates a hugh demand and lucrative profit for its lens business. Besides, it preempts its main rival Nikon by locking new DSLR user into Canon equipment system (switching cost is hugh when user switches camera system).
Comparing the above story anologically to pricing of iPod mini, you could see that if Apple makes a low-priced entry product, demand for iTune Store service will be tremendous in term of both volume and profit.
However, we all knew that Apple missed its chance. It failed to further boost its iTune Store business, failed to use its First Move advantage as well as preempting rival such as Real.
A pity on this. Period.