Convergence — the concept of “any device, anywhere, anytime” — carries its own imperative. There is an inexorable dynamic compelling convergence — it is already largely widespread in both Asia and Europe — and to a not inconsiderable degree the US is playing “catch up” in this arena. That said, the US does have the advantage of determining what “works” and what doesn’t by examining Asian and European markets (i.e., as they say the “pioneers are often the ones with the arrows in their backs”) — but in any regard convergence of devices, content, & services is a reality and will only continue to become more tightly integrated.

First of all, no brand name provider can “afford” to make available inferior products irrespective of the price or drop in consumer demand and discretionary buying power. Therefore, when consumer demand drops, prices are forced to drop usually proportionally or otherwise loss of market share is usually the result.

Typically there are always one or more parties from among multiple providers for similar products that will “take the hit”, cut their prices to the bone or even below cost, in order to retain market share. This is understandable given both the high cost of securing market share in the first place coupled with the expectation that market conditions, at some point, will indeed improve and prices will rise to better reflect the value / quality of the products being offered — thereby avoiding the immensely more costly prospect of having to rebuild market share (and/or a tarnished brand as the result of delivering inferior products due to dropping prices).

Simply put, in this instance price does not reflect the quality or inherent value of the product — quality which must remain high due to competitive forces and market dynamics or suffer the risk of loss of market share and a possibly tarnished brand — but rather prices simply reflect the fact that demand and discretionary spending has taken a “nose dive” and providers have made a business and financial decision that they must make all necessary adjustments accordingly.

The real “dynamics” here — hidden or otherwise — is the need to always deliver a quality / superior product or someone else will and any failure to do so will result in loss of market share — and extremely expensive proposition as noted — or a tarnished brand resulting from a low quality product (with similarly branding being an enormously expensive proposition).

As such, all told, low prices is the “least expensive” route for tech providers to take — namely given that these products have already been in development for some time — hence r&d expenditure is already largely a “sunk” cost — and sheer daunting expense of loss of market share and risk of tarnished brand are significantly more important and cost-driven considerations.

Lastly, as for high end products — similar to many “luxury” categories across market segments — they tend to target consumers that will continue to make the expenditures required for the products they want / desire most. That is not to say that luxury products are “recession proof” per se — rather that given their generally limited supply to begin with, there are usually enough deep-pocketed consumers who will continue to pay asking prices for top end products often irrespective of market conditions (unless they too have directly suffered dire consequences of market crises).

In summary, price does not always equate with quality — the underlying dynamics are the need to retain market share and brand image — and simply “ride out the storm”.