I was looking at a report today, plotting the price for a smartphone in the US. In May of last year, it was over $200. Now, after the Palm Treo 800w was discounted from $199 to $99 at Sprint (to leave room for the Treo Pro) and T-mobile cut the Pearl 8120 and 8220 to $79 (gulp!), the average price is $147.
Anything that goes below $150 is, by definition, affordable to anyone. It is less than three months of phone bills. It is mass market.
In an economy that is collapsing, people need to save cost and cheer themselves up. I know, it sounds bizarre, but games do always very well in a down economy. It is human nature (and having more time to waste, I guess).
Would you buy a desktop with DSL or a smartphone that can also be a camera and an mp3 player, always connected to the network, with a navigation tool like Google Maps? The former is probably $500 plus $30/month for Internet. The latter is $150 plus $20-$30/month for data.
And you will feel much better after buying it, because you can carry your shiny thingy with you everywhere, showing off iFart to your friends.
Bottom line, the smartphone is going to be one of the few areas of growth in this economy. And the price will keep coming down. A Perl for $79 is low but it can go even lower (to zero).