If you're not guitar gear nerd, you might be unaware: Fender doesn't make the best version of its various guitar shapes (with one debatable exception)[1]. If you want an off-the-rack "S-Style" guitar (Stratocaster) there's a handful of premium, smaller brands that will make an objectively better guitar than any of Fender's offerings, including their premium "Ultra" series: Suhr, Anderson Guitarworks, James Tyler Guit…
Fender has cannibalized their brand, just like Ray-Ban and many other manufacturers known for a "classic" design. But what's changed recently is that now they're not just feeling the competition from premium-priced guitars; they're getting squeezed from the low end, sub-$1K part of the market coming from China and Indonesia. Recently I played a Chinese made Telecaster copy that was better in terms of quality and play…
This was true in the 80s with Japanese competition as well (the last time Fender tried putting the body shapes back in the box) - Tokei and friends were making vastly better guitars than even the American Fender production at that point.
The way Fender survived was by buying the top producers and forming Squier guitars as their entry level.
> It's a shame to see a once-great American brand get cooked by resorting to lawfare instead of QC.
They did this in the past too, largely over the headstock shape. My "main" Stratocaster-type guitars (despite owning several genuine Fenders of different vintages) are a pair of Levinson Blade R4s - one has the Fender-shape headstock and the other has a modified version from after Levinson got sued in the 90s.