I think they have less reason to be concerned about their competitors than they do about their pricing. $99/year for a somewhat crippled version of Dropbox is steep.
I am not sure what you mean by crippled... nor do I have vested interest in Dropbox. However, I would be remiss to not mention 1,000GB of storage on S3 would run you $23USD. Now this is before calculating management, request and data transfer pricing.
I just did the math and now thinking I should pay for Dropbox, instead of S3.
Yes but most people don't use 1tb, which is a problem with inflexible pricing models like this. If you're using 100 gb, which is probably the more typical user, you're still paying $100 a year, which isn't competitive with other options in the market.
the thing is, many people would be happy with 100GB for a lower price and still having the option to chose betwenn plus or pro. But it's either plus or pro for 100 / 200 per year which is a bit steep.
I just did the math and now thinking I should pay for Dropbox, instead of S3.