The price of data storage has plummeted in the past two decades. The original Apple Macintosh shipped with a 400kB hard drive in 1984. Today's mid-range personal computers now ship with 100 GB+ hard drives. The entry-level iPod comes with a 30GB drive. Flash memory is cheap enough that laptops are starting to utilize NAND memory chips for faster boot-up times.
Of course, in the technology world when something gets cheap it inevitably gets smaller, too. So now we have affordable removable memory cards that store gigabytes of data and come small enough to fit into even the slimmest of mobile phones. As such, I've come to think that the mobile handset market is where the really exciting consumer technology innovations are starting to take place.
Take music phones as an example. I just got ahold of a first-generation Nokia N91, one of the first phones to boast an internal hard drive for iPod-like storage of your music (and photos). The N91 has a 4GB hard drive, or room enough for roughly 1,000 songs. The N91 is also something of a beast of a handset, especially compared to a 4GB iPod nano. All of that size, combined with its $800 price tag, meant that the phone never quite caught on.
Just a year or so later, Buy.com is routinely selling 4GB Sony Memory Stick Pro Duo cards for as little as $65. The card is compatible with many of Sony Ericsson's Walkman line of phones, including the Cingular-branded w810i which can be had for as little as nothing with new service activation. So for $65 I can basically have a music phone that cost $800 not one year ago. Except that the w810i is smaller and has a better camera than the N91.
The point is that the mobile phone industry is rapidly approaching a place in which creativity and software design will be the only real limitations on what a handset can (or can't) do. Even in America networks are getting faster and more reliable, and both the size and price of components like LCD screens, camera sensors, and quality digital audio processors is dropping as their quality goes up.
Nokia has started referring to their N-Series handsets as "multimedia computers" and not "phones." Silly as it sounds, they may just have a point. Wasn't so long ago that 4GB of data would fill a small room. Now I can pop a chiclet-sized chip into my phone and carry around photos, music, videos, and more - and have them all at the ready for my own use or wireless sharing with my friends. That's cutting edge.