We’ve reached a point now where smartphones are ubiquitous. I myself have a Blackberry Curve, the iPhone 3Gs is out, the Palm Pre is there and by summer’s end a number of Google Android powered phones are expected.

So far the trend has been to build more and more computing power into the devices so they can run plenty of applications. That’s not where things are headed though.

Switching gears for a second back to traditional Desktop computing: Pano Logic [LINK] make a tiny little box that completely virtualizes the computer. Huh? what’s that? It means your operating system doesn’t run on this box, it runs elsewhere, usually in a data center someplace, accessible through the Internet. The tiny little Pano box just communicates back and forth with this instance of your computer, sending keyboard clicks, mouse movements and clicks to it, and getting back a screen image to display.

This technology is not new. I’ve used VMWare and Virtual PC to run various operating systems for years now. When you need to “upgrade” you just change the configuration of the virtual machine. Need more memory? Just change a setting in the config.

Folks like Amazon have been building out a very robust “cloud” based computing platform over the last 5 years (the Elastic Computing Cloud) which is targeted at web-site hosting. It’s pay-as-you-go with very rapid scalability available on demand. This means that web startup I worked on in 1999 that paid $4,000,000 for spanking new managed hosting with EMC and the whole nine-yards could’ve saved that and grown organically. It’s a great system.

Back to Cell Phones, here’s where I see things going: There’s a certain critical mass in terms of device-technology you need to attain and I believe we’re there. Devices have touch-screens, crystal clear displays, small form factors with built in video cameras and support for WiFi aswell as multiple cellular networks. We’re good to go.

The next step is to virtualize the phone operating system. Separate the software that normally runs on the phone from the thing that is the phone device. Have the phone run in the cloud and the device be just a proxy to that operating system. This will enable a number of things.

1. Your phone will no longer be tethered to your device. Huh? Yeah, you’ll be able to leave your phone “thing” at home, yet still access your phone from any internet access point.
2. Your phone will now have infinite storage.
3. Your phone can now run infinite applications, simultaneously.
4. Your data is now accessible from anywhere. You can synch your phone’s data to your home PC or Media Center or xBox and so on.
5. Upgrades will no longer mean waiting for a new phone device.
6. The focus will rapidly switch to the operating system and so Google Android will have a huge advantage whereas the iPhone will lose its hardware-specific advantages.
7. Voice over IP will replace the phone network. Phones will maintain GSM, CDMA, Edge etc. connectivity and likely still use these for some time to come but ultimately the Internet connectivity will be what matters. Things like Skype will merge into the cell-phone business.
8. Battery life will either be extended or stay the same. I don’t know about you but my phone gets HOT when I use it. This is due to the phone’s CPU cranking away. If the bulk of the processing were running remote, I’d imagine the battery’d be cooler and spend less energy powering the local CPU. I’m not sure about this one though since connectivity itself might increase and eat up power.
9. The phone can run…even when it’s OFF. Yes, of course, the device is no longer the thing that controls when the phone operating system is running. You could have the remote operating system actually wake up the phone device when a call comes in. Pretty cool.
10. No more downloads. Your device never needs to receive anything from anyone, it’s all sent to the remote operating system. The device communicates exclusively with it.
11. Let’s face it, your desktop’s headed this direction. Ultimately your Phone and your Desktop will be able to share common storage, like a network-attached disc. Same thing with your DVR. You’ll be accessing TV shows you recorded at home from your cloud based phone. Everything’s backed up. The world will slowly accumulate thousands of copies of digital junk…
12. Because data and storage are now unlimited, a new trend will emerge which is to capture and log everything you do all day. This is more tied to battery life but I could envisage a cell phone that records its GPS position, and takes a picture every five minutes, shoots these up to the cloud. I’m going to call this “Life-logging” or “Flogging”. The world of the “Blogger” will be obsolete. (ok I’m going out on a limb here a bit).

The road is clear for this to happen. The technology is there, the market is certainly there and so of course the opportunity is there. The question now is who’s going to be first?

If I had to put money on it my guess would be a combo of HTC + Google.