> Why do you have to design, test, manufacture and sell a 64MB drive
> before you can attempt to make a 128MB one? How does the former help you
> do the latter? Why can't you just jump straight to 4GB? (Or perhaps even
> more than that?)

You need to learn how to make 4GB ones, or more correctly, how to build 
a factory to mass produce 4GB ones.  And you're not going to do that 
overnight in the lab if you are currently only making 64MB ones.  It 
simply won't happen, you'll go bankrupt (because your competitors 
figured out how to make 256MB ones and you didn't) before you figure it out.

The only way to do it is to stretch your existing process to make 128MB 
or 256MB ones, trying to fix the odd few problems that will no doubt 
come up.  That is called research and development.

Once you have a stable process for 256MB ones, you can again try and 
push to make 512MB or 1GB ones, you will no doubt come up against 
different problems than you had last time, you might need some fairly 
big steps in technology development, but it's possible.

> Then again, cars don't improve in performance at all. Today's cars have
> performance within a few percent of cars made 40 years ago. And yet,
> people still buy cars.

Compare pretty much any criteria and cars have vastly improved.  MPG, 
power, safety rating, braking distance, amount of rust, noise level, 
pollution level, ride quality.  It is quite an achievement given that 
many of those factors are trade-offs against each other (eg better 
safety means higher weight which means lower MPG, yet MPG has increased 
significantly).

> On the other hand, pens and pencils don't improve in performance either,
> and they still sell plenty of those.

That's just because you don't work with designing pens :-)  I'm pretty 
sure they are continually using the latest materials and inks available, 
you just don't notice that your pen doesn't snap as easily or 
clog-up/stop working as often as it used to.

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