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Very interesting. I expect Apple to keep the same camera for the upcoming iPhone (4S?) and not improving it that much for iPhone 5 (to be released one year from now?) which I guess would lower the camera's price. I also expect the other manufacturers to keep improving their cameras (even if just for marketing) which would make it at least as expensive as it is nowadays making it harder for them to lower the final price.

In all this I'm assuming 5mp + HD video to be enough for a smartphone. Is it?

(Apple might improve the front camera though.)

I'm very pleased with the 1080p recording in my Galaxy S2, but i think whats the real issue is the file sizes.

1 minute of 1080p video is 100mb of data, which is understandable, but still too much if i want to post it to facebook or some place else over 3g, or even a open WiFi.

So as you say, 720p might really be enough for smartphones.

As more smartphones become fast enough to record and encode 1080p on the fly, they'll also become fast enough to scale 1080p down to 480p or lower for sending over 3G. In other words, if the CPU has direct access to the video encoder (and not just a pre-encoded stream of 1080p H.264 video coming from a separate camera chip), then the CPU can probably use that same encoder to transcode videos as necessary for uploading, on the fly.

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