This turns out to be a key component of Clay Christensen's original theory of "disruptive technology" (before it became a buzzword.) The theory is that the disruption comes in part because existing producers ignore the new technology, since initially it is only of use to a tiny niche in the market that doesn't care about performance. The niche is left to bit players, but it turns out to provide them enough oxygen that they can invest in R&D and improve the technology, eventually to the point that it's the best choice for all but the highest-end applications.

http://www.amazon.com/Innovators-Dilemma-Revolutionary-Chang...