mmurph Offline Upload & Sell: On
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Every manufacturer tries to price their products appropriately for the market, technology, and value that they deliver.
They are balancing literally many hundreds of thousands of variables, starting 2 years or more before release data. Hard costs of R&D, new compontents, tooling, projected hardware costs at release time (RAM, CPU's, etc.), fabs, yields, taxes, shipping costs, competitors products, etc.
There is a stage of planning that takes all of those variables into consideration, as well as the economy, exchange rates (a huge variable for a transnational company), etc. The more skillful companies are successful over the long term, with multiple products (Toyota.) The less successful suffer incredibly for their errors (RIM Blackberry.)
Every company is a "Brand." Most companies work very, very hard to be known for value, quality, customer service, etc. Most HIGHLY PROFESSIONAL (ie: long term successful) companies are not deceitful or destructive in any way ("lets gouge the customer"), because they know that will damage their "Brand" and be a failing strategy.
The biggest issues for companies like Canon right now are:
1) An incredibly challanging (adverse) global economy, all hitting at the same time, like never before, and
2) A historically very, very strong Yen, that squeezes profits like never before, and makes "Japanese" products (manufactured there, with profits repatriated there) 50% more expensive than they would have been 4 years ago.
This is probably the worst selling environment in history for Canon, Nikon, and others. That is why so many companies have failed (Olympus), or are at risk of failure (Panasonic).
Yesterday the Yen was at 78 on the dollar. In 2008 it was 120. If Canon sold the same 5D2 today for $3,000 as in 2008, they would get in Yen the equivalent of 78/120 = 65% of what they got in 2008, or $1,950 net (equivalent.)
When average Corporate net margins are 12% to 15% maximum (average stock returns) , taking a 35% off the top cut on every sale is HUGE. It is the equivalent of armagedeon for the accountants.
So: No, they don't hate you! They are desperately trying to survive until things improve!
Best,
Michael
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