Imagine you're the CEO of a hardware company that refreshes their products every year. Last year, you overestimated the demand for your premium product and end up with thousands of extra units.
Now, you're planning to launch this year's line of products. You have a brand new premium product that's slightly better than last year's, and it's priced $50 higher. What do you do with all your extra stock of last year's premium offering? You can't sell them side-by-side, otherwise everyone will just buy last year's stuff and you'll have the same problem next year. You can't throw them away because you can't afford the losses (GoPro was trading at $8 in 2017).
So you take last year's premium product, and install some software to turn it into this year's entry-level product. You have to sell it for way less, but hey — you might break even. Consumers are content because they're getting what they expect: entry-level features at a reasonable price.
It's not necessarily evil. Perhaps it was mismanagement. Ultimately, GoPro found out that the market for action cameras isn't as big as they hoped.
Now, you're planning to launch this year's line of products. You have a brand new premium product that's slightly better than last year's, and it's priced $50 higher. What do you do with all your extra stock of last year's premium offering? You can't sell them side-by-side, otherwise everyone will just buy last year's stuff and you'll have the same problem next year. You can't throw them away because you can't afford the losses (GoPro was trading at $8 in 2017).
So you take last year's premium product, and install some software to turn it into this year's entry-level product. You have to sell it for way less, but hey — you might break even. Consumers are content because they're getting what they expect: entry-level features at a reasonable price.
It's not necessarily evil. Perhaps it was mismanagement. Ultimately, GoPro found out that the market for action cameras isn't as big as they hoped.