Tactically, yes. Tactical freebies are wonderful, and no sense blowing off a gift from a competitor.
Since this is presidential election season and careful parsing is a high art, I could be timid and say "yes, but". But really the answer is "if you believe his post, which is that he has earned back his NRE and can now price the camera differently whilst sustaining the business, then indeed RED could be able to price across a really wide spectrum. Many companies have learned that R&D doesn't scale linearly: you hire a bunch of smart people, 99% of their ideas are dumb, but the 1% are a game changer. You don't then go an hire 2x more R&D people hoping to get to 2% smart, or even 2x more smart ideas. YOU PLAY AS HARD AND FAST AS YOU CAN WITH THE NEWLY CHANGED RULES. RED do have a pricing decision to make, which is really, how many R&D people do they want to invest in (hint--not many, and only the best), how much profit is needed to keep the business sustainable through a variety of situations, and then they have the choice how to to distribute the remaining $$: dividends (Jim is already a billionaire and doesn't need an income stream to fund his retirement)? excess cash in the bank (that earns 0% interest)? Or back into the hands of customers, that will then continue to change the game.
I don't own a RED, though I have been thinking about it. I have a pair of AF100s as my low-cost prototyping platform. Now I'm ready to step up. Do I step up to SONY? CANON? or RED? It depends on short and long-term value, and I'm a big believer that RED has a fundamental competitive advantage in terms of their modular strategy. The big news is that the mortgage on their modular strategy has been paid off. They are now free to innovate without the huge overhang. That opens up a far wider range of options than are available to pricing wizards in Tokyo trying to figure out how to sell the least amount of camera for the most amount of money. Jim wants to sell the most amount of camera for the least amount of money, because he cares about filmmaking. And he wants to do so profitably because that makes the business sustainable.
I'll bet you $1 than six months from now, there will be a substantial opinion--beyond the so-called fan-boys--that my interpretation of RED's actions is more accurate than yours.
Bring it on ;-)
Indeed. Canon is playing a different game, and I believe you are absolutely correct that the market is adjusting their spreadsheet predictions in real-time. Canon guessed wrong, and they are "paying" via a mechanism of incremental price reduction. RED is going to zap the price once, they're going to do it big, and either they will reach a new economic efficiency level and lower it again, or they will find that they did redefine the market and force the monoliths into a very difficult match-up with the masters of modular.
much of what you write makes pretty good sense to me on most days if im reading considering the trickling upgrades from pany, sony, canon etc...but, it such a huge coincidence that this hit just ****one day before RED will adjust their prices***. now, anyone here still want to say that RED lowered their prices because they have a big heart for their customers? i dont buy it for a minute. this is comical. honestly i think jannard would have done better to just lower the prices without this long winded bullsh$t story about caring about their customers. it really sounded silly. with all of that said i have complete respect for RED as a very competent camera company as far as their gear goes. still, i think the way things work over there is so so silly.
http://blog.creativevideo.co.uk/2012/10/sonys-newf-cameras-revealed-f5-f55/
http://pro.sony.com/bbsc/ssr/show-highend/resource.solutions.bbsccms-assets-show-highend-F5.shtml