This article talks about the fast rate smart phones keep improving with the new iPhone. It explains how the sales growth of smart phones will be reduced because of the increase in cost for the new features. The increased costs will translate into higher priced phones and price out a lot of people. The major cost component talked about was flash memory for the programs and downloads available. If flash memory comes down in price the smart phones will not rise in price as much as anticipated.
I think the features on the smart phones have shifted the demand curve out. Before the iPhone came out, there weren’t too many people waiting in line for days over a $500 phone. It will be interesting to see how technology will change cell phones.