Looking at some of the latest Smart/PDA phones they have pretty reasonable processors, fairly significant amounts of memory, WiFi, 3G, Bluetooth, GPS, VGA screens, audio, video, voice, camera etc.
Do I really need my laptop anymore?
Most development work on most of our projects are performed using Virtual Machines running on VMWare or Hyper-V clusters. I just RDP (Remote Desktop) to them. A large amount of applications are web based applications - even the mighty Outlook/Exchange. Word, Excel, PowerPoint - that's a bit sticky, but if Google have their way most of that stuff too will be web based (even though that doesn't escape the need for reasonable local compute resources).
Assuming that the mobile device has got enough "grunt" to run those applications, then all it really needs is a nice big screen, ergonomic keyboard and mouse. We can't be far away from docking our mobiles on arrival in the offices, just like you might do with your laptop. If I really need a laptop form factor then surely it can't be a leap to design a laptop that just hosts the docking mobile. I can already see the iPhone sliding into a very slight Mac, or a HTC into a Dell. This host could provide additional battery power to cover the large bright screen and extended use running applications at higher clock speeds.
In the short term it won't satisfy the power users, but there is a large majority for whom that would work very well. Of course, when you couple this with Cloud Computing for data storage and application virtualisation it could all be very easy. I should just be able to walk around with my second brain - docking it to extend/enhance its capabilities.
Mobiles will become smarter at detecting their context and adapting to exploit it. In mobile mode it behaves as you'd expect, and when docked it will step the processor speed up, switch resolution and prioritise network usage towards a fixed local network / WiFi over 3G etc.
Device 0. It will shrink and shrink. Soon it will just be a chip in a key fob. I could insert Device 0 into a mobile phone style device giving it networking, a display and keyboard which I could further dock in a laptop or just slap on top of a Surface Computer.
Eventually, embedded in my person, Device 0 will wirelessly detect nearby resources: adopting and adapting to them them. I walk up to a Microsoft Surface and I am off... If you take this to the extreme, Device 0 is just my secure identity. The environment will provide all the resources and the cloud will extend this.