Originally posted by 24X36NOW Actually, Pentax nearly went out of business by pursuing *exactly* the strategy they are currently pursuing - offering no high end enthusiast/professional gear (in this case, FF) and focusing on low/lower end "consumer" grade gear. This brilliant strategy - which many here tout as the road to success - is how Pentax went from selling more cameras than anyone to an also-ran. If history teaches us anything, it is that Pentax needs to move upmarket, and that means a FF offering is a must. Competing for nothing but a small piece of the most crowded market segment is sort of like slitting your own throat.
The 35mm market was ALWAYS crowded. It is a standard, open-source format. That's why Kodak wasted its energy trying to change film formats under patent.
Pentax in the 1970's got trumped because Nikon, then Canon, followed by Minolta, embarked on a low-end volume sales strategy. Then Nikon took those gross revenues and subsidized a professional market where they practically gave the gear away for free just to have the product associated with the shot.Goal: advertising. Canon followed, moving aggressively to the sports and nature photographer whereas Nikon was the portrait and art scene. Canon stole a huge chunk of the market. Minolta rocketed up the sales charts because they took Canon's marketing technique and made them about the technology and price ""From the mind of Minolta") , about the same time as the PC was taking off in the early 1980's. Nikon looked like your grandpa's Oldsmobile, Canon was too "pro", so Minolta almost moved into 2nd place. Pentax, Oly and other brands (Konica, Yashica) never quite recovered. The move to digital was equally brutal, but the need for optical legacy was a factor in favour of some smaller players.
What history teaches is that in the long run, you need mass market sales to drive capital accumulation and gross revenues. With those leveraged, you can pursue other markets. Ask Hyundai. Ask Porsche (fascinating ownership about-face there). What history teaches--now more than ever--is that up market will kill you if you cannot continue to drive a large revenue base. When everyone moves "up market" what's left for the rest?