Firmware is the type of software, which is bound to a certain device. It is embedded in this device and is the lowest software layer that exists (one step lower, there is the hardware). Firmware can (normally) be updated to enable certain possibilities, which were not possible at the writing time of the firmware. Let s say Factory XY is working at a DVD Player. At the time X, they have go to have it finished, but the firmware does not support burning discs at that time. But maybe the hardware does... So what happens is: They first sell the DVD Player without burning support until the firmware is finished. And if you update your DVD Player, yours will also have burning support...

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