I think the big mistake PC makers are making right now, is that the PCs they make aren't improving from generation to generation for their mass market products. Sure the processors aren't doubling in MHz like they used to, but the rest of the machine isn't improving either. If I go into a shop with $3-400 today and buy a laptop, the machine I get is the same as I would have gotten 3 years ago:
1. 768 line display
2. 5400 rpm hdd
3. 2 GB of ram (4 if I'm lucky)
4. Similar weight
5. Similar poor battery life
6. loads of crapware.
The pc manufacturers aren't pushing hardware manufacturers to improve the cheapest spec. Why don't cheap new laptops have greater DPI on their LCDs than 3 years ago? Because manufacturers haven't changed their main production lines. They are saving money on retooling, but on the other hand their product isn't improving, and now they're paying the price. Apple is doing the same thing with their Air line, which is only improving the processor generation, it has the same body and screen as years ago.
If manufacturers improved their cheapest line every 3 years, people would see enough of an improvement in their price range to buy a new machine every 3 years like they used to.