Smartphones, Moore's Law and Radical Mobile Value Shift

Article in The Economist today on the trends in Smartphones:

Prices are now on a downward spiral, says Ben Wood of CCS Insight, a research firm. Several other handset-makers are already offering cheap smart-phone-like devices. Android allows cut-price Chinese firms such as Huawei and ZTE to enter the smart-phone market, which they had previously stayed out of for lack of the necessary software. Last month T-Mobile, a mobile operator, gave a taste of things to come. Its British subsidiary started selling the Pulse, an Android-powered smart-phone made by Huawei, for only £180. (The cheapest iPhone model sells for £340 in Britain if bought without a contract.)

If you take this trend and extrapolate according to Moore's Law, in about 9-10 years time (depending on your inflation assumptions) you get a sub £10 device that is as powerful as today's iPhone. (See chart above) What happens globally then, when the poorest of people can afford comms and computing like this. And what does £300 buy then - a 30x more powerful device at the same size, a device as powerful as today's at 1/30th the size. What opportunities does this drive? What happens as RFID prices lso fall and we can integrate to penny-price "Internet of Things" devices.

Answers are unclear, but one thing is for certain - as The Economist notes:

All this reflects a broader trend in the industry, where value is migrating from firms that run networks and make hardware to those that make software and offer services (see article).

Interesting times are set to continue for another 10 years at least.