Suppose you have a warehouse full of widgets. You bought them them for $450 each, and sell them for $500. You're really happy with this profit, and you can just keep selling them at $500...forever, right?
But then, I get my own warehouse and fill it with widgets that I bought at $400 each because I entered under better market conditions. And I really want to sell these widgets -- they aren't making me any money when they just sit there taking up space and burning rent.
So I price these widgets at $475, to attract customers. It works; the widgets are flying off the shelves. And they're being purchased by people who used to be your customers, and I'm making even more money per-unit than you are.
What's your next move? Do you want to keep losing customers to me, or do you want to adjust your price to be more competitive?
A new entrant isn't guaranteed to now price at $475. They'll see the incumbent being successful at $500. Now they price at $499 rather than trigger a destructive price war. Companies collude on this quite frequently. When everyone keeps their prices high, all get to enjoy the big margins.
Outside of that, ok so you have a warehouse full of widgets you need to move fast. So you undercut, and sell out. If demand is still bigger than your supply, you're now out of capacity, customers are going back to buying for $500 from your competitor. That means you've mispriced your limited inventory, so now you raise your prices up to closer to $500 because it helps you control your capacity, and also you know the market can clearly bear it.
Anyway, those are obviously overly simplified scenarios prices rarely fall down dramatically because of tacit collusion. Its asymmetric price transmission ("Prices go up like rockets, but fall like feathers")
Retailers are mostly free to offer things at whatever prices they want. But the market has more power than you may think to correct it.
> They make about $20 per user annually and, assuming an active TV service life of five years, yield about $100 over the lifecycle of a main viewing room TV.
https://omdia.tech.informa.com/om030986/in-the-smart-tv-indu...
Look at monitor price drops (comparing the same tech). Same price drop curve.
You can also look at computer monitors (which don’t have advertising and spyware) and see an enormous price drop.
Edit: I found this which estimates you can make about $100 in ads and data collection over the lifetime of a TV https://omdia.tech.informa.com/om030986/in-the-smart-tv-indu...