Originally posted by LamyTax
Imagine Pentax goes bankrupt because of not making enough money
Straw Man argument. That just isn't going to happen. It just isn't. Not. Going. To. Happen.
A company budgets R&D investment for product development from its Capital accounts, not from its Cash Flow accounts. Cash Flow accounts yield dividends to the upstream owner and have little to do
directly with generating funds for new products. (Hoya was not interested in Pentax because they demand 20% ROIC and the best camera company only yields 8-10%).
The real point of entry level camera bodies is to develop the installed base of branded, distinct camera bodies - you could even say an installed base of lens mounts like the K-mount, whcih is the brand distinction. Once a company has a large enough installed base of camera bodies all kinds of good things happen which have synchronicity benefits (synergy, with some pixie dust included):
- Customers buy a second lens
- Third party manufacturers release in your mount
- Customers buy their lenses
- Customers buy accessories - flash, case, whatever - (very profitable)
- Because they have the installed accessories, customers buy another camera when technology improves enough
- Base cash flow increases enough to permit general brand marketing (image advertising).
- Which leads to brand receptivity, which makes it easier to increase the installed base
- Customers buy a camera kit as a gift for a family member (more than one body per household)
- which deepens the installed base
- Customers buy a camera kit as a gift for a different household
- which broadens the installed base
- Lower-information customers shop in local-market stores rather than online
- and tend to permit upselling and accessory adds-on
- Etc., Etc.
The same marketing logic is behind "The Many Colors of Pentax" - trying to attract the impulse buyer, the gift buyer, the early adopter, the buyer who views a black dSLR as an intimidationg, professional device.
Pentax needs to keep doing these things, over and over and over, without any more interruptions by financial engineers and corporate chieftains.
We'll be fine. Let the team play out the entire season.