…by 2012, iPods could launch at similar prices to those on sale now and yet be capable of holding a whole year’s worth of video releases.

That’s a quote from Nikesh Arora, Google’s VP of European operations, speaking at the FT World Communications Conference. (link)

I agree, but it reminds me of something Microsoft VP Jeff Raikes said on a visit to Australia around about 2000. I remember him talking to the MSFT staff over breakfast and predicting that by 2005 most televisions would ship with a terabyte hard drive, enough to store a year’s worth of programming. What happened? Storage costs have continued to come down over the last few years and you can buy a 250gb hard drive now for about $200. So a terabyte should cost about $1000. Still way to much for you to tack onto the cost of a TV. So what happened?

Still, it is undeniable that storage costs are continuing to drop and that we should see that trend continue for some time. And as storage costs and wifi rates drop, the mobile devices will increasingly become portable media players. TPN was built around that vision two years ago. By 2010, I expect the vast majority of the one billion mobile phones in circulation to be mobile entertainment devices. And someone has to build the content that goes on them. These devices by then will have open access to the internet and the “walled garden” models that mobile carriers like to push today will have mostly disappeared. Anyone will be able to download any content and will be charged either a fixed rate by their carrier or might even get free internet access in return for targeted advertising (easier to do on a mobile device than it is on a PC).

It’s going to be interesting to watch the end game between mobile handsets manufacturers (Nokia, Sony Ericsson, Motorola, etc), Apple, and the mobile carriers, as they battle over business models, voice traffic versus VOIP, etc.