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According to a Reuters article, camera phones will be able to shoot 1-megapixel pictures suitable for e-mailing to a friend by next year. By 2005 "some camera phones will boast at least 2-megapixel picture quality, good enough to print quality 4-inch by 6-inch pictures," the article says.
Meanwhile, there are rumors of Apple R&D dollars being spent on handheld video conference devices. Some insiders speculate that within the next two years Apple could unveil a product that will allow users to video conference with friends wirelessly from the palm of their hand. Maybe a better question is: how far is Apple willing to expand it's iPod digital music player?
By mid-2004 Apple's iPod will allow users to play music, record digital audio, store thousands of digital photos, manage daily contacts and calendars, and act as a mobile mirror of their Home Mac OS X directory. The device currently performs all these functions with the exception of the latter.