There are a couple of factors at play. My mother bought an iPad2 (I was surprised!), and she's never owned a portable gadget more complex than a feature phone.

There are a couple of factors at play. My mother bought an iPad2 (I was surprised!), and she's never owned a portable gadget more complex than a feature phone. Her reasoning boils down to network effect--she's easily able to Facetime some of her kids (and grandkids) overseas, because they have an iPad. It's not a matter of displacing the iPhone or iPad, it's a matter displacing the network ecosystem of capabilities and users built up around it. And that's why no one's done it yet. Hardware won't do it. Software won't do it. Even hardware and software together won't do it. So long as the cost of switching to a new "network" of features is higher than the perceived value of the new network, it ain't gonna happen.