Part of this was spurred by poisonduk, who hasn't upgraded her iPhone for ages because nothing that the new versions do is sufficiently better that she feels any need for it. And part of it is due to me feeling the same way about the upgrade to Jelly Bean (and, indeed, ICS).
I got my Galaxy Nexus nearly six months ago, and it's been very good to me, but basically it's a larger version of the phone I already had (HTC Desire) that finally has enough space to breathe (so I don't have to delete apps so often) and enough processor power to not stutter occasionally when running apps that needed more power. As with the Desire, I nigh-instantly replaced the stock launcher (home screen), SMS, Email, Browser, and Dialer apps with ones that worked more the way I wanted to. The only thing I feel is a step backwards is the move towards software buttons (I like my fingers finding buttons through muscle memory, which they can't do if the buttons aren't physical), other than that it's all better, but not in any life-changing way.
So, if we stick with the overall shape (big slab of touch-screen), what can we do with that that you can't already do? I guess that more take-up of NFC would be nice, so that I had the option of using it as a wallet. But that's not vital. It already has internet capabilities that could cope with faster than my phone provider can manage*. 4G might theoretically be nice, but I can already do full-screen streaming video on it without a problem. For a tablet, multiple users would be useful (and there are signs that this is coming), but for a phone? I can't think of anything that I want that it doesn't do.
The next steps all seem likely to involve changes to the physical qualities of the phone - flexible plastic phones that roll up, phones that are glasses you wear, phones that include projectors. Resolution-wise they're topping out, with the iPhone the first to make pixels too small to see when held at standard phone distances, and others not far behind. Functionality wise, a sheet of glass that I can swipe my fingers across to access data from all over the world seems to be doing everything I can think of.
What am I missing? What could phones be doing that they aren't already?**
(The corollary of this, of course, is that if phones are doing everything they need to then they'll become increasingly commoditised as they become cheaper and cheaper for the same functionality. And, hopefully, get better battery life, as they stop trying to do more, and instead do the same more efficiently.)
*HSDPA can manage 42MBit, but I don't think I ever get more than 1/3-1/2 of that.
**And nothing that couldn't be done through an app - I'm talking about base phone functionality***, not "what phone app doesn't exist?".
***Or phone provider functionality. I've ranted before about how rubbish it is that I can't tell my phone "Tell people I'm busy, but allow them to interrupt if they believe it's an emergency."
Original post on Dreamwidth - there are comments there.