Free Hardware?
Bill Gates has us imagine a future where hardware is free. Not literally free, but free compared to what we pay for a level of performance today. This isn't such a hard thing to imagine, given that the price/performance for today's hardware viewed through the lens of, say, 20 years ago, makes today's hardware seem very nearly free.
(Insert obligatory anecdote here about how my first hard drive cost $2,000 and held 10 MB; and I just recently bought an 80GB hard drive for $80, or a factor of 200,000 less in 20 years).
A more interesting thought is: how can computer hardware become not relatively free, but literally free? Literally free as in you go into a computer store and walk out with a brand-new Dell without spending any money from your own pocket?
The key is to tie the hardware to some other purchase, such as a service contract. Mobile phone companies have been doing this for years, subsidizing the price of a phone (often down to zero) in exchange for a service contract. The price of the hardware is effectively added to the service contract.
This was tried a few years ago in the Early Dotcom Era, by bundling an Internet service contract with a new PC. It didn't fly at the time, in part because standalone PC's were dropping in price so fast that nobody cared about getting one free; and in part because it was too hard to prevent people from using their Free PC to go with another ISP. You'll notice that your subsidized mobile phone doesn't work on anyone else's network.
Today, with hardware prices at $300 to $400 (without Windows), and broadband Internet service at $35-$45/month, the DSL and cable modem companies could give away a PC with Linux and OpenOffice in exchange for a two-year contract. On the other hand, anyone who can afford cable modem service probably has a PC anyway. So, no free PC there.
Microsoft could afford to give away a free PC to anyone who pays full retail for a copy of Windows XP Pro and Office. Nice bundle: get XP Pro, Office, and a free computer. Unfortunately, nearly everyone will find it cheaper to buy the computer and take advantage of the many discounts available for Microsoft software.
With Xbox games providing Microsoft with $10 or $20 in royalties each, there's the option of giving away free Xboxes, as long as the average Xbox owner buys enough games. I suspect, however, that few Xbox owners buy the 20 or so games which would allow Microsoft to cover its hardware cost (it would, however, effectively kill the competing platforms).
None of these models looks particularly attractive. So, maybe we won't be getting free hardware any time soon.
But one thing is certain: even if Moore's Law continues for another twenty years, in the year 2024 we'll still be complaining that our computers are too slow. They'll just be slower at doing more things.