Shuttle’s small form-factor KPC comes out today at $300, instead of $200 as originally planned. The little shoeboxes, with Celeron CPUs, 512MB of RAM, an 80GB hard drive and linux, are still cute as can be, only they now cost more than an actual pair of shoes, even in the the barebones version, which goes from $100 to $200.

Given how frequrntly companies lowball their prices, there must be some counter-intuitive assumption about psychology in play. When we see yet another gadget announced at half the price it ultimately is, how can that be a good marketing strategy? It looks like a combination of naivety, wishful thinking and margin-padding: they’re selling something they’ve publicly assigned a conceptual value to at a much higher price.

If Shuttle had announced their budget box at, say, $400, today we’d be gushing about their amazing price drop and quoting its happy remarks on improved component sourcing and production efficiency. Instead, we’re reporting that it’s doubled the price of a product it announced weeks ago. How, pray tell, does that help shift product?

Note: I still love it and am buying one. Maybe that answers all the pertinent questions here.

Tags: home cinema, DVD, equipment, pvr