Because you are working to put the competition out of business?

But, in my humble opinion, fighting with lower price isn't good option (for anyone, in the long run). You should fight with features and/or better quality.

Depends on your market position. You can create a lot of value in the marketplace by commoditizing and simplifying an over-serviced, over-delivered, over-matched product.

This works in software too. For instance, Gmail and Amazon Web Services pull prices down on webmail and cloud services respectfully.

If the competition's strength is excellent service for more, provide no service for less. I know it sounds weird, but it has often worked. In a maturing market, many pragmatic and conservative customers will prefer the cheaper, simpler packaged product. The key is that you cut prices by far less than the actual cost of service of the premium competition, so you can make more profit across a wider base of customers.

Well there trying to say that they have a better feature set than a product that's worth over $200 but the average price there getting is $5, it's just devaluing the product.