This concept "Line Phone," which, according to TheNextWeb, recently took the gold in a Chinese product design competition, may well represent the final word in smart phone hardware. As you can see in the video, it's essentially a screen, thick enough to hold the necessary guts plus a presumably large battery. Buttons are scant — instead, every available surface is touch sensitive.
A caress in one direction selects an audio track, a thumb somewhere else adjusts volumes. Placing two fingers, top and bottom, lets you scrub through the song to find a particular verse. Tilt the phone up and down, or sideways, and new modes appear. I'd be worried that I'd accidentally make too many changes, with so many surfaces trying to interpret my every move, but one imagines that good UI design would take this into account.
The best thing about a phone that's essentially just a screen is that you can put a bunch together. The final portion of the video is the most visionary: Without bezels to bar one screen from the next, you'd theoretically be able to stack these phones four across, and see a movie. If everyone in your family had them, that is. The little touchy-feely candy bar could even become a Wii-remote-style game controller, which makes sense since phones today are equipped with sensors for tilt, acceleration and even direction.
Like most concepts, this thing probably won't see the light of an electronics factory, but its basic conceit — that phones will one day be screen-only beasts — is inevitable, barring some massive upheaval in electronics and design.