Sennheiser, a world leader in transducer and headphone technology, just opened a research center in Palo Alto near Stanford University (and half a block from the beloved Fry’s Electronics store!). I went to their open house reception today, which had several executives from their German headquarters, a member of the Sennheiser family, the mayor of Palo Alto, and many of the most prominent audio researchers in the Bay Area.
The recent openings of satellite research centers the Bay Area is an indicator that technology companies are doing well and investing in the long term. Research is usually the first thing to get cut at the slightest hint of financial difficulties, and opening a research center in the Bay Area produces a significant hit on a company's net profit. Such research centers typically do not provide positive support to revenue for many years, so their formation requires long-term dedication. The formation of these centers is also indicative of the realization by companies that they need to work harder to compete on technology development.