Marc is a smart dude but those predictions are fairly obvious going forward. We are going to see an absolute explosion in smart phones but the high reoccurring fees is the main reason why consumers stay away from buying smart phones. Lets hope the monthly fees start to come down ( will likely keep climbing though, gotta love VZ, ATT etc.)
This might describe the U.S., but prices for smartphones in the developing world have a different starting point. They are forced to be cost competitive (both for the handset and voice/data) from the outset in order to get any initial traction. The Huawei Ideos (Android) has been quite successful in Kenya where it sells for about $80 with an initial allotment of minutes and data, which users than can then reload as necessary.
Huawei has sacrificed on tech specs to be cost competitive. I wouldn't be surprised if future entry-level smartphones in the developing world hold the technology relatively constant and focus instead on getting the viable price point even lower, which is the reverse of what we see in the U.S. where the price stays relatively constant but the handset technology constantly improves.
I'm not sure if you noticed or your parent was edited, but it specifically says "high reoccurring fees." I share this sentiment, and, therefore, only have an iPod Touch/ cheap phone. I pay $33/mo (incl. tax) for 1k min+1k sms+200MB data). I'm mostly near a secure wifi connection and the limitations of this set-up are worth the savings.
To be clear, upfront costs have never been an issue for me, and I kind of wonder why the Android ecosystem has mostly failed to recognize this opportunity. Actually, I realize most people don't know how or want to bother with setting up proper SIP on a LAN (local SIP agent on router, etc.).
Off-contract phones are really the only thing keeping T-Mobile alive now, I think. Those will just turn into smartphones vs. featurephones. Plus the whole non-USA market.
In 2012+, I could see $100-300 true smartphones, bought outright, or heavily subsidized by a non-telco (e.g. you get a BoA sponsored phone with an account with direct debit, or more realistically some more profitable, faster growing business like walmart).
Combine that with MVNO service through the sponsor, month to month. Or, free service if you make a minimum spend on another service -- e.g. free cellphone with $100/mo comcast, or if you spend >$1k/mo at Amazon.
Pretty similar to the Kindle now -- buy the device once (subsidized), make no or minimal ($79/yr) recurring payments, and then shift most of your discretionary and non-discretionary spending to that vendor.
