I think because while average prices for individual devices go down, you make up for that with volume in an expanding market. Once you saturate the market, then you have to diversify, create new markets or consolidate (buy more market share).
A computer manufacturer doesn't need to increase their market share to keep the same profit when a process technology matures and therefore gets cheaper.
It is trivially possible to keep making money selling computers even if the total market share doesn't expand.
As an entity, yes, but overall as an economy this does not work. How will you be able to afford giving employees raises? Cut the workforce, and then what happens when everyone 'cuts the workforce'? what happens to total buying power?
