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This caught my eye and I think it's a mistake.

Phones are... "primarily there to provide processing muscle for other gadgets. As chips get even smaller, phones may not be needed even for that"

So they're saying that eventually wearables will become independent of phones. In theory that sounds great, but in practice I don't think that really works. Even when we can put all the storage and processing for an iPod into an ear bud, how do you select tracks, switch to playing podcasts, adjust volume levels, check battery status, etc, etc. You could use voice commands to some extent, but how do you browse content or download new content while out and about?

The watch is more capable and at least has a screen, but it's still too small for content browsing and management functions. We moved to larger phones not because that's needed for longer battery life or more computing power, the iPhone SE and mini proves that, but because a decent sized screen is more useful for most users in itself. We can quibble about how big it needs to be, but phones really aren't going away because you still need a rich and capable UI.