I see what you're saying, but the big box, outsourcing-production-to-cheap-overseas-factories phenomenon has shown us that lower price (at least lower percieved price) tends to win out over higher performance across a wide swath of products. You can lower the price/performance ratio by either building a kick ass product (making the denominator larger) or you can sell something cheaper and shrink the numerator. For the most part, Americans have voted with their wallets and gone with lower prices.

For a more CR123-specific example, look at digital cameras. CR123's used to power a lot more digital cameras. But then rechargeable lithium ion battery packs came along. Now people didn't need to keep buying "expensive" CR123's and could just recharge the battery packs at home to save money and now there are few CR123 powered cameras. What was once a pretty ubiquitous market of CR123-powered cameras shrank because consumer preference chose something else.


This train of thought is missing that middle piece--between "20 times better" and "becoming a standard," people have to want it and be willing to pay for it. IPhones were never cheap but people wanted it and were willing to pay for it. Overseas, where mobile phone companies don't subsidize the price, people are still willing to pay full price for iPhones even though they much lower incomes because they want it so badly. And now iPhones are ubiquitous around the world. CR123's will not become ubiquitous unless there is a widespread demand for them first. Demand drives expansion of manufacturing capacity, which increases supply, which at some point should lead to lower unit prices. If you're selling $1,000 batteries five years after introducing them to the market, don't blame limited distribution. People just didn't want them badly enough.

Another recent example just popped into my head. Look at the netbook market. Just a few years ago, they were sold at every cell phone store and every electronics retailer on the block and everyone had to have one, but then the iPad came along and ate the netbook's lunch (and dinner and dessert, to boot) even though the iPad was more expensive than the netbooks and not necessarily any more capable. You couldn't even watch YouTube videos on the iPad! Hmmm, two Apple examples in one post. Just goes to show what a genius Jobs & Co. were in coming up with wildly popular and even gamechanging products.