Making full frame sensors is expensive, that's why they cost so much.
They can make over quadruple the number or APS-C sensors out of the same wafer size as full frame. e.g. 60D APS-C = 14.9x22.3mm = 332.27sq mm. 5D III FF = 24.0x36.0mm = 864 sq mm. A 300mm wafer has about 70,500 sq mm.
With the number of cameras they sell, I think it's very unlikely they would see any cost savings with a single sensor design. More likely they would lose a lot of money.
Which makes it very unlikely they would ever drop their prices as low as you're suggesting. Realistically they'll stay the same or see a slight bump. They'll likely try to keep the Rebel & X0D series close to the D5X00 & D7X00 series (if not slightly lower, which they traditionally are by about $100).
If they eliminated the X0D model, they are also eliminating any (semi)affordable DSLR with a good grip.
A Rebel for $600-950 vs a 7D II for $1700-2200 is a huge price difference. It leaves a big gap for Nikon to fill w/ a $1200-1500 D7000 successor (which has a good grip & feels more solid than a Rebel).
If they don't have a 70D they have no D7000 successor equivalent & they lose all customers who think the Rebel is too small but don't want to spend 140+% more $$$ (than a X0D or D7X00) to get in a 7D successor.
If they really wanted to stand out from the pack, what they could do is increase the size of their APS-C. All APS-C sensor are not the same size despite sharing the same name. Canon could make a APS-C sensor that, while still smaller than full frame, is larger than Nikons 1.52X Crop factor. That's the only way I can see them drawing out 500nm sensors. That would create a problem w/ the current crop sensor lenses causing vignetting however, so that's unlikely to ever happen.
Unless, they could just have the camera shoot a lower megapixel crop of the larger APS-C if it detects a older crop lens is attached, and if a full frame or newer crop lens is attached then it shoots the full sensor at a higher MegaPixel. That would be interesting. Dollars to donuts it won't happen though.
I know where you're getting at, but like I said the price section isn't what I was trying to get at. It's the way of thinking that I am trying to show you. Most of us are use to seeing a Rebel , then a X0D, then XD, all having incremental upgrades. But instead of that, why not have a Rebel line that isn't crippled. See you're scared that Nikon will have an advantage of that middle price ground with something "similar". But think about it, no one will have anything similar to this idea I'm trying to get. This is why it's bad for us consumers when we can't tell the difference between Nikon and Canon products, no one is revolutionizing the market.
The cost of FF is expensive, but that doesn't necessarily make a product expensive. The cost of R&D and these random sidetracked "improvements" to the cameras they're doing is what's really making a camera expensive. Instead of wasting time and money with "middle ground" products they will focus on just 4 line product, which in itself will lower costs. Also think about it, if Canon stopped crippling their lines, how would you think of Canon now? A lot more people would get Canon, which in turns means Canon makes more of the Rebels which will keep cost per item lower.
Rebel would be the best entry camera, not being crippled in sensor and AF designs, but being limited by the 3 main areas I suggested. All the way up 1D which would have the MP needed for product shooters but not sacrifice the speed and noise quality everyone else would need. Think about it, people shouldn't have to choose anymore, the only reason we do is because no one is bringing or creating anything new to the plate.
You get me?
There's a limit to volume savings. Canon is only able to fab X amount of sensors. If they can sell them all for $200-800 but they sell them for $50-200 instead there's no benefit, just loss.
There's also the issue of pixel size. If they put FF sensors into APS-C cameras & just cripple it with firmware, it's not just the cost of the FF sensor they're losing, it's the megapixel race. FF sensors have much larger pixel sizes, bigger microlenses for better high ISO performance. But that also means if you used the same design on an APS-C camera you'd end up w/ a 6ish MP camera which consumers would look at as if Canon is nuts, trying to rip them off, is 1/4 the resolution of Nikon's APS-C.
Hackers would love it I'm sure. They'd likely find a way to activate the whole sensor.
Canon's current R&D method is working for the most part, they're just dragging their feet switching to a smaller fab; because they already own their own 500nm. The rest of their tech is evolving fine though. Autofocus (sensitivity, accuracy, recognition, & prediction), video, touch screen, & color accuracy are all areas they've stayed ahead of Nikon.
I understand you'd like to see generational leaps closer to what you see in the computer industry, but with Cameras they can't use the same model. Their material costs are higher & their volume is lower.
I know where you're getting at, but like I said the price section isn't what I was trying to get at.
You've actually put the cart before the horse. Apple has clearly shown that price strategy comes first when figuring out model differentiation.
Take a look at any of their product lines, and you'll see they almost always have four different models with fairly uniform spacing of the price between each. They then have a similar type of overlap between product lines -- MacBook Air => MacBook Pro => iMac => Mac Pro.
The net result is that it's easy for a customer to mentally slot into a broad category of desired product, easy to figure out which model fits the budget, and then -- and this is key -- the price points are closely spaced enough for the customer to reasonably imagine stretching a bit and buying the next model up.
That is, if you want to have a laptop and your budget is $1,000, the MacBook Air is right there for you. But just $100 more gets you twice the flash ("disk") storage, an easy upsell. Or $1,200 gets you the entry-level MacBook Pro, with much more impressive specs and not all that much more heft.
Viewed from that perspective, Canon's got it pretty close to right. The Rebel line needs some cleanup; they should ditch the T3 and drop the price of the T2i and do a bit of rounding; I'd put it at T2i @ $600 => T3i @ $700 => T4i @ $1000. When the T5i comes out, price it at $1,100 and drop the prices of the others by $100, retire the T2i, and continue that pattern. I'd drop the 60D, call the rumored 70D an 8D instead and price it at $1200. The 7DII keeps the 7D price at $1600 (and the 7D goes away), then the 6D @ $2100, drop the 5DII when stock runs out, and the pro-level stuff they can price however they want. You're then left with three Rebels and three xD models for the masses, with gradual price jumps along the way. Funky branding and pricing is probably a bit of a plus for the top end, which is why the huge leaps and lack of naming consistency isn't a problem for the 5DIII and 1Dx and anything else (like the super megapickle studio camera) that might come along.
In tabular form:
T2i : $600
T3i : $700
T4i : $1000
8D : $1200
7D : $1600
6D : $2100
(pro stuff however it falls out)
While I agree with the reasoning behind your argument for the most part, I think raising the price of a rebel to $1,100 is a bit much, considering the D5X00 launches at less than $900.
One of the reasons Canon continue to outsell Nikons is price. They usually launch very close in price, but then Canon drops their price in 3 months & then again in 6; making them the cheaper alternative. The fact they can do this while still making their cameras in Japan (as opposed to China like Nikon) is impressive in itself, imo.