From what I gather, it's a combo of ultra-cheap miniaturisation, vast output quantity, dirt-cheap workforces, exchange rate benefits and threadbare industrial rights legislation in the Far East. And the Internet for that humungous low-cost marketplace. Stack 'em up high and cheaply enough and even selling for crumbs can put you in the lolly.
Especially these days, when progress means even these trinkets can be of solid, serviceable quality. I have an S-VIDEO-to-VGA box I bought for a tenner, in good quality with plenty of controls. This is an improved version of what I paid £30 for just two years back. Just gasp at that price-performance ratio, even if the makers are miserable and work 18 hour days.
An extreme example being Apple, taking their own advantage of the cut-price tiger economy for on-the-floor 'underheads':
http://www.dailymail.co.uk/news/article ... -hour.html
