True, they can lower the costs but to what degree. For example if Kayfun v4 was $80, ricks would you buy the authentic or the clone?
In an ideal market, supply has to match demand, similarly, the price of something has to match the amount of money consumers are willing to spend, like Adam Smith`s invisible hand theory.
But, when you introduce clones to the mix, the market is not ideal anymore. Because original manufacturers can`t sell it for $20 no matter what, while there are cloners out there who most certainly will.
Now you have created two different sets of consumers.One set who is willing to pay for authentic for whatever reason (principle, quality etc), and another set who is mostly buying clones. Under this market structure, we now have two "invisible hands", one for each set of consumers. i.e. if cloners increase the price from $20 to $80, they might lose their customers to authentic producers etc.
So technically, original producers must be happy, otherwise they would decrease the price. But, they decide to differentiate themselves from the clones. If one day, they decide to sell 100,000 units instead of 1000, they will decrease the price. If not, they won`t decrease it. Plus, if they aim to sell 100,000 units, because of the economies of scale, their costs will go down as well.
What I believe is that since this industry is new, there is not enough segregation between brands (i.e. ford vs. bmw vs. ferrari), and there isn`t enough market information to make strategic decisions i.e. at what price I should sell this atty so I can maximize my profit?
One of the reasons why companies grow is that they know how to calculate strategic risks and in this case to answer the question of how to maximize profitability. Since clone market is a given, then you have to adjust your own strategy. Over time, the companies that can navigate through this will prevail, while others will not survive.
Sorry, I am also an analyst in my daily job, I couldn`t help myself