Normally economists think of deflation as (from dictionary.com) "A persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit." This can also be seen, when individuals in an economy delay purchasing goods because of the assumption that the price will be lower if they delay. This causes a viscous downward spiral where merchants lower prices to attract consumers, the consumers are validated in their prior assumption, and so they either delay further on the considered good or on other goods.

   My conjecture is that this occurs not only in times of falling prices, but also when technological change is above a certain amount. Consumers delay in the purchasing of goods (such as computers or digital cameras) because they know that they will be able to either purchase the same item for a lower price in the future because something better will have come out, or that they will be able to purchase a better item for the same price for the same reason.

   This, in the long run, can cause reduced research and development because research actually ends up having a negative impact on a companies bottom line. This may or may not become an issue, because the companies responsible for research will tend to sustain a level of product improvement that provides sustained development, while at the same time not cutting into current sales of a product.

   Another result is that a company that has monopoly powers in a particular market may choose to not roll out their best products because this would hurt current sales. The indication that this may be happening would be sustained low-level improvement of products with little to no radical advances. This is the current state of the microchip market: Intel rolls out gradual speed bumps every two quarters, and they've been consistent in this for a period of 5 years. Is this evidence of an Intel monopoly? Probably.