Then more specific to underwater housings and gear, this is a much smaller market than the scuba market itself since many divers don't buy this type of gear.
The price on these items are so expensive that most people scoff at the idea of buying the setups creating a smaller market. A smaller market means that each unit, for those that do buy, will be higher. The higher price means a smaller market...a vicious cycle. Reduce the price and you will get more customers. For example there is a restaurant where I live. Good restaurant but charges way too much...people don't return because the costs are so high...the costs are so high because people don't return. If they reduced the price they would have more repeat business. Solid product, terrible price.
The reason that housings cost so much is that they are essentially hand made, one at a time. A very big very expensive CNC machine will be able to make only one at a time. There is no volume effect where is you make a bunch you can automate. Ikelite molds their housings so once the mold is made you can make the second one a lot cheaper than the first one but the first one costs a ton.
Wait there is someone hand making the camera setup? These are not machine made? Meaning if I take housing X and place it next to housing X they will look somewhat different? I am pretty sure these devices are machine made. The first product, in ALL manufacturing, is the most expensive. The first pill for a new drug line costs millions, the second pill costs 25 cents. Hence the pill costs $1 per pill. Same with this. The first housing will cost some very high number...each additional one is marginal (relatively speaking). The problem is that buying a camera setup can easily cost you way more then your entire scuba setup and that scares most people.
Go find your local machine shop and ask them to quote you on a housing (and bring them an example) Bill
This is not a great example. If my housing were a unique product it would be a great example but it is not. Dive photography is a small market but the market is so small because it is so expensive. One poster mentioned the Canon housings...yes they are not as good as they other brands, especially the aluminum ones. Still going from $150 to $3,000 - $5000 is HUGE. The material costs are fairly irrelevant, so it's the design, markup, and volume sales. We are a niche market, but it's also self-inflicted pain.
I also know many divers who use the Canon lines and never had an issue with it. I used my Canon G11 at 130 feet without a single issue.
There are ways to reduce the price of these products 1) get more people to buy, 2) improve manufacturing, 3) reduce costs to customer. Unfortunately it's hard to get more people to buy when costs are so high. It even gets worse that when you want to upgrade something like a dome and the price is high. Even worse...for the rig that I bought to get the MFG rope/screw was $40...I mean come on I think we can all agree that an 8" rope attached to two screws should not cost $40. Or can someone illustrate to me how an 8" rope and two screws is justified with such a high cost?