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Especially in consumer electronics, a large number of goods are offered only in some countries. Usually this holds only for products which have some close substitutes available (e.g., screens, where a particularly cheap models are often only sold in the U.S. but not in Europe). Such cases are not too hard to explain via price discrimination.

However, I recently found out that there exist products which do not have close substitutes such as Sony's E-Ink readers but are nonetheless only available in some countries. (Production limitations were my first thought, but the example product is already several years old.) Given that the online retailer market is very efficient and that consumer electronics have large development costs I could not come up with a reason why consumer electronics producers would willingly restrict their own market size.

Since I do not believe that producers make such decisions without good reasons, I would like to know what these reasons are. Note that the example product is not the only case, similar cases can be found earlier in the cell phone and PC markets.

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One way to look at this is through the idea of "fixed costs". It only makes sense to pay the fixed cost if the market is big enough.

There is very likely a large a fixed cost of entering a market. You have to establish a network of retailers or at least distribution channels, a way for the customers to return the defective units, partners that will also supply the covers, the software, the adapters, etc. Often you have to register the devices with the local regulators, they have to approve them for sale in that country, etc.

From the marketing perspective there are also fixed costs. You make a single advertisement campaign per country, and you use it everywhere in that country. I suppose there is a minimum word of mouth effect that needs to take place for any marketing to be available, so I suppose a small marketing campaign is unlikely to be efficient.

Also, sometimes products are sold or presented basically as flagship products, or loss-leaders, to call attention to the technological prowess of a firm, but not because they are all profitable. So, if a brand does not face a lot of competition in a country, it might not introduce these products as selling them, might actually represent a marketing expenditure.

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  • $\begingroup$ Here are some remarks on your answer with respect to the specific example. Sony has a distribution network in many countries and makes almost no marketing for the E-ink reader in the United States. At least one of their US distributors sells other products worldwide, but is apparently forced to sell the reader only in the U.S. The fixed costs of development of an electronic device seem very large compared to registering the device with a regulator. While your answer may apply to some products, in the given example I am still puzzled... $\endgroup$ – HRSE Mar 20 '16 at 2:42
  • $\begingroup$ Yes, there are probably other things going on. Somethign that is harder to develop in the case of E-readers is the e-book infrastructure of editorial distribution rights, copyrights, etc. Some countries do not have a legal framework updated for this kind of thing. $\endgroup$ – Fix.B. Mar 29 '16 at 18:26
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I would guess large barriers to entry for doing business in different countries: Differing laws, need new suppliers, more uncertain demand (less knowledge of customers and consumption habits). In less developed countries, possibility of seizure of assets.

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