Naturally, as one progressed from the lowest resolution to the highest, the price increased significantly. BPS had chosen to focus on the top-of-the-line markets where its commitment to R&D would give it a major competitive edge. Sony shocked the management of BPS, as well as the rest of the industry, in 1989 when it unveiled its newest projector at the Siggraph trade show in Boston. By introducing a product that was both technologically superior as well as less expensive than the current units available, Sony demonstrated that its expectations of future market demand was different from everyone else. What the industry saw at that trade show was a projector which offered superior performance at a price not previously available. (2002: 10) Sony had obviously decided that the graphics segment of the market held the most potential for profitability and the least direct competition.
BPS anticipated increased competition in the data segment of the market. ...
Accordingly, BPS was positioning itself to introduce a competitive new projector targeted to that same market in 1989. Its plans for delivering a better graphics-compatible product were scheduled for the latter part of 1990 because the expectation was that Sony would be focusing on the data segment, not graphics. (2002: 10, 12) In this expectancy, unfortunately, they were sadly mistaken.
Sony had clearly decided that the high-end graphics market segment was ripe for exploitation. The reason for this is likely due to Sony's perception that it could successfully drive the industry using its strong manufacturing base. In broadening the market by offering superior technology at lower prices, Sony would be forcing the other manufacturers into a price war. This was a battle that BPS could not afford to fight. (2002: 12) Further, if Sony could catch its competition off guard, no one would be able to respond with a competitive product before Sony had seized a sizeable advantage in terms of market share and brand recognition. Sony rejected the BPS vision of the market because Sony saw an opportunity in the high end of the major market segments and moved to get there before anyone else.
The threat of the Sony 1270
There is no doubt that Sony's new projector was a major threat to the other manufacturers. Within any market, it is vital that a producer provide a superior product. When that product can deliver higher performance at a lower price, it is well on its way to capturing market share. If the manufacturer can then provide sustained delivery to pre-release orders and post-release customers alike, they should rightfully expect to see the positive impact on their bottom line. From BPS' perspective, imagine