According to Wired, Bill Gates is making predictions involving the future of hardware costs:
Hardware costs will fall sharply within a decade to the point where widespread computing with speech and handwriting won't be limited by expensive technology, Bill Gates said Monday.
"Ten years out, in terms of actual hardware costs you can almost think of hardware as being free -- I'm not saying it will be absolutely free -- but in terms of the power of the servers, the power of the network will not be a limiting factor," Microsoft's chairman said.
Well, this is an obvious position to take when much of the rest of the industry is working to make the OS free :)
Hardware being free
I remember reading in a Scientific American article that many future-looking folk are predicting the formation of a "computer grid" that works something like a power grid for electricity. People will pay a monthly fee (that will likely fluctuate with their CPU usage), but all they'll have at home is a collection of dumb terminals. Giant supercomputers here and there will supply the computer power for the community.
They compare the current situation to one in which every member of a community used a privately-owned generator to provide electrical power to a home.
It's an interesting thesis, and it would probably drive down the escalating costs of computer upgrades and help get more powerful computing power into the hands of the public. Still, municipal computer power plants seem a long ways off, yet.