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I don't really see what capabilities you can add to smartphones today that they don't have already.

Let's be honest. Most people don't see what lies in the future, and that especially includes people who should be closest to it. How'd Microsoft do in the phone space? RIM? How good was Palm at predicting the future? Anybody remember DEC?

Other than that, I don't see anything that would require significant hardware changes let alone an octo-core processor.

It isn't always about the hardware. It's often about enabling the hardware. iTunes made the iPod a vastly superior box, even as the box itself only made incremental improvements (smaller form factor, colors, price points.) I would say iTunes cemented the box, wouldn't you? Siri, for instance, is a "proprietary feature" intended to add value to the iPhone and not to competitors.

Sadly, I think Google is better positioned to take advantage of most of this. If you're going to add the virtual wallet (and try to move in on the MasterCard business), you're going to want cross platform compatibility to ensure the largest possible customer base. Likewise other apps that might take best advantage of crowdsourcing: traffic reports from Waze or dating apps like OK Cupid or whatever.

Google has built an effective "ecosystem" of information - from shopping to maps to news to email, from music to video, and they are even trying in those other dimensions which might hold promise: electronic payments, disease monitoring and control, energy conservation, and so on. (They haven't been universally successful at each and every one, but then Windows didn't gain its outsize share overnight, either, and persevered in spite of some pretty lame product failures.) Oh, and, of course, "smartphone OS", where having a larger share equates to a (potentially) richer data pool, and therefore a better overall experience in all of the above.

In fact, it's not hard for me to see a day when the "smartphone" is barely a phone at all, it is your entire computer for your life, and the only thing anybody buys besides that is a screen of whatever dimension and a keyboard of your liking. I mean, why do you need all those chips in a tablet, and chips in a laptop, when you will have a chip you pocket that can interface anywhere you happen to be with any generic display or input device? People will remember when a "credit card" was actually a piece of plastic, when medical records were kept at the doctor's office, when you went to a bank to cash a check, and so on. It's already fading, isn't it? Triple the chip power, then triple it again and the world changes. Who will be out in front of those changes?

But then I said "nobody can predict the future", so here I'll stop.
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