NEW YORK ( TheStreet) -- What will be the next "wow" factor in smartphones? Where will the next battles be fought? Let's go through the list:1. Bigger display? Not really. At around 5 inches, hands aren't getting any bigger and the bezel is approaching zero. No more room for expansion here. We have reached the limit. 2. Better display resolution? Not really. The first 1080p display is here ( HTC Droid DNA on Verizon ( VZ)), but 720p was already good enough for high-end phones. Going beyond 1080p? No way, not useful for the human eye. We have reached the limit. 3. Thinner phone? No way. People want more battery life, not thinner phones. At some point, too thin becomes uncomfortable to hold. We have reached the limit. 4. Better battery life? Absolutely. There is plenty of headroom on this one. A source of perennial potential improvement. Infinite improvement ahead. 5. Faster networks? Sort of, but they are already here. The LTE standard will improve, but Qualcomm ( QCOM) has the requisite chips and they will upgrade every year. We have reached a plateau for the next five years. 6. Integration/simplification? Yes, always. A major goal for SKU-reduction and cost reduction is to enable more radios on one chip. This is where Qualcomm leads the way today. Continuous improvement ahead, but largely invisible to the end user. 7. CPU/GPU processing power? Yes, sort of. There will always be improvement here, but for most people right now, the hardware is far ahead of the software being used. 8. Camera? Yes, for sure. But how many people care? How many people think the current high-end smartphone cameras are good enough? So what's the bottom line from this list? Smartphone hardware evolution will focus on improving battery life, and to wait for Qualcomm to put more radios onto one chip, so that they can achieve the goal of eventually selling one phone around the globe. Therefore, imagine this headline/advertisement: "New smartphone from Big Carrier XYZ! It's got 14% better battery life and the manufacturer is able to have you buy the same SKU that he sells in Nigeria and Japan." Doesn't that make you thrilled to spend $349 or $649 to upgrade your smartphone!?
7 inch tablet: $200 or less.One of these four does not look like the others. The smartphone price is so much higher in relation to the basic hardware content. You can buy a Nexus 7 tablet and a Google ( GOOG) laptop for $400 combined, or 35% less than a single iPhone 5! It makes absolutely no sense. Then add the fact that all the Microsoft ( MSFT) PC licensees are feeling the heat from a failing Windows ecosystem, and are seeking new revenue opportunities. Microsoft is making its own PC now -- the Surface -- and perhaps soon its own smartphone. If you are Acer, Asus and Lenovo, just to mention a few obvious ones, why not focus more on Android smartphones as you did on Windows PCs? Yes, it was hard until now because keeping up with the spec war was difficult, with Apple ( AAPL), Samsung, HTC and a few of others such as Nokia ( NOK), RIM ( RIMM) and Sony ( SNE) duking it out for the high end in a fast-moving spec race. But if the race is now reaching something of a plateau? Then the game changes. The hardware race to radically cut the relative high-end smartphone price will be mated by a reduction in service cost. Why and how? There are two reasons: 1. At some point, the hardware becomes so relatively cheap -- unsubsidized high-end Android smartphones probably approaching $199 a year from now -- when subsidies won't seem as attractive anymore.
10 inch tablet: $400 or less.
Laptop: As low as $200.
High-end smartphone: $350 to $650 (unsubsidized)