Yes, I refuse to compete on price. One of my favorite phrases (just read it in a email an hour ago, in fact) is "your price is right on the edge of my budget."
How do I know that the main competitor isn't slowly going out of business at that price? Maybe their product is total crap, maybe I can offer stellar support that's worth a higher price, maybe I can guarantee GDPR compliance, maybe I can offer uptime guarantees, maybe my product is designed to a small niche that will pay a much higher price for a product targeted exactly at them, maybe I can focus on large customers who would be suspicious that a $4.99 price is way too low, maybe, maybe, maybe. In the end, ask yourself if you really think that $4.99/year * n_Customers computes to a number that makes it worthwhile for you.
How do I know that the main competitor isn't slowly going out of business at that price? Maybe their product is total crap, maybe I can offer stellar support that's worth a higher price, maybe I can guarantee GDPR compliance, maybe I can offer uptime guarantees, maybe my product is designed to a small niche that will pay a much higher price for a product targeted exactly at them, maybe I can focus on large customers who would be suspicious that a $4.99 price is way too low, maybe, maybe, maybe. In the end, ask yourself if you really think that $4.99/year * n_Customers computes to a number that makes it worthwhile for you.