as ratmagiclady said, and: i am not sure where you get the idea they must make a higher profit for each unit, anyway. they are, literally, not as big as canon or nikon, and you would be surprised how this can mean less operational overhead (less wasted money), also, they really don't need to make as much money as nikon or canon, they just need to make enough.
by niche i didn't mean the features of the cameras, not necesarily. as i mentioned on another occasion, what really sets pentax apart is their attitude, and the niche is the people who appreciate that, and care about attitude. you could say pentax is for photographers who just want to take pictures and not be hassled by their vendor, and have nothing to prove through the writing on the pentaprism -- but that would be too narrow and unfair. it's actually hard to define exhaustively what their demographic is, and this is, imho, their hardest task at this moment, after they figure it out, "all" they have to do is go get them. perhaps they already did figure it out, and the k-7 is a result of just that. we will see.
ps: interesting idea about the k20, ratmagiclady, i would love to see this camera turn into a k1000 of sorts, i am so in love with this camera i think i would easily buy it a few years from now and would never feel i have to appologise for my pictures, or be frustrated while using it. i honestly think the k20d was the finished k10d, what it was meant to be in the first place, but couldn't wait to finish (amazing job they did with the k10d, if that's true), given this, i am genuinly curious what they can offer in the k-7 to blow our mind so much as to make me want to ditch my k20d, i doubt they will. i hope they keep producing the k20d as a "poormans obsoleted camera, oh well, you can get the dinosaur if you really can't afford a modern camera", i'd buy two, one as a second body, and one as a spare; no, make that 5, the two i mentioned, a spare to the first body, a spare to the second body, and a spare to the spare (one can never be too carefull), and one to lend to my friends when their new toy is misbehaving or whatever, okay, that's six.. you get the point