I reckon the time is about ripe for decent, well-designed, "cool" GSM/GPRS (maybe EDGE) handsets, with good-enough cameras (2MP or 3MP), good-enough MP3 functionality, good-enough browsers and a memory card slot to get to the sub-$100 mark on an unsubsidised basis. We're not quite there yet (at least not in the UK), and it will be the cheaper Asian brands rather the Nokias & Motorolas that get there first.
(Note: I don't follow component prices that closely, so I may have underestimated the cost a bit. Might be another year, or maybe $150 is a more reasonable price. The argument below still applies however)
$100 (or £50 here) is about the price of a midrange Swatch or similarly interesting watch, or other fashion item like a decent shirt, or a reasonable meal for two. In other words, the sort of money that 100s of millions of people will spend on a typical weekend afternoon or evening without flinching. It's the sort of price, in other words, at which subsidy becomes much less important, and a handset could become an impulse purchase.
It could be argued that people will always want an even better phone - 3G, bigger screen, good email experience, accessories, full OS, better browser, 5MP camera etc etc. But to be honest, I think that's a relatively small proportion of customers. After the addition of camera & music player, I don't see any other "must have" feature has emerged for phones in the past 2 years, except for the relatively small proportion who definitely want ultra-converged smartphone functionality. Most "civilians" I talk to (of all ages) can't/won't even do basic web & email on the phone.
I got the definite impression at 3GSM this year that handsets were starting to come to the end of their "cram in more functions" phase of evolution. If design is the last real differentiator, the market may shift very rapidly indeed, as "good enough" phones commoditise apart from aesthetics. GPS could possibly be a saviour, I suppose. TV? Hmm, don't think so - a new "killer feature" needs to have a "non-revenue" angle to it, the way that cameraphones and MP3-phones don't have to be used with carrier services. (Neither 3G nor WiFi is 'must-have', by the way - most people just don't care).
This could have a couple of effects:
Firstly, people will have a tendency to own even more multiple devices than they have now. If it's cool & funky & different & only $100, why not buy 3 of them? (caveat - clearly, there needs to be a zero-click way to share the phonebook between them. Constantly swapping SIMs is a barrier too).
Secondly, there's perhaps going to be more demand for "vanilla" handsets rather than operator-specific variants. This isn't certain... but it only takes one innovator with a hypercool product to take a risk and only sell direct to end users and not via carriers, and perhaps the market shifts. This is why the price is important - Apple's iPhone is too pricey to sell in large enough numbers to overturn the carrier channel for the mass market, for example - hence why it's gone with Cingular I suspect. Cutting an exclusive deal with a high-profile retailer that doesn't sell mobiles normally could be a good route here. And hamfisted lock-downs of phones by some operators provide additional impetus (step forward most of the US carriers, in particular - I see T-Mo has darkened its reputation in recent weeks)
I'm not sure this will definitely happen. There's a huge amount of intertia in both handset subsidy and users purchasing through operator channels. But it's a scenario I see as becoming more likely, without any other "must have" features on phones.