As prices drop manufacturers begin to lose money. In order to continue to make big profits they must also make big advances in technology to drive more sales.
Why do technology companies continue to innovate while their current technology offerings continue to sell like crazy? Once again supply and demand makes itself known, but not in the way one might think. You see, as more and more companies begin to offer the same or similar products the price for that kind of produce begins to drop. This is why prices on such products as HD-DVD and BluRay players are falling as more and more companies churn them out for the masses to purchase. As the prices drop, the profits that these companies receive begin to drop as well even though they are selling more of them. In order to boost their bottom line a company has to innovate and push forward with new technology to get the public to buy into the next big thing.
One of the more recent examples of this has been detailed by Infoworld. It was recently published that many flash memory companies are seeing the bottom fall out of the prices for their memory chips that are used in digital cameras, recorders, and a host of other portable devices. At about the same time, Micron and Intel recently announced that they had designed a new type of flash memory that is up to four times faster than current flash memory designs for both reading and writing speeds. With all of the talk these days about green technology (low power usage) this advance could make solid state computer hard drives an even more prevalent part of mobile computing. Because of this big jump in capabilities expect the new memory chips to be sold at a premium once they hit the market. Thus the cycle begins again, at least until other companies start cranking out their own knock-offs.
