Thanks to Moore's Law it is now nearly as easy (and cheap) to incorporate information processing into a mass-produced object as it is to create a custom injection-molded plastic part. The capability to manipulate information and create behavior has become a component instead of the goal of digital product design. Soon, Internet-connectivity for bathroom scales and wireless sensors in running shoes will be expected options, like color and finish. We will take for granted parking meters that send us messages before they run out, just as we take for granted Bluetooth headsets, MP3 players and Netflix streaming.
This movement towards computational objects that don't look like what we currently describe as computers represents a fundamental shift in the design of technology. It blurs the edges between industrial design, product design, architecture and interaction design. It's been called many terms ("pervasive computing," "ambient intelligence," "The Internet of Things", etc.). I use "ubiquitous computing," the name Xerox PARC gave the trend in the late 1980s.
Ubicomp has been a long time coming. Xerox PARC made good progress in the early 90s (see this 1991 video), and momentum to develop useful embedded computing devices was starting to build, but then the Web hit. Attention and investment shifted to the Web, which only required traditional computers with a screen, keyboard and mouse. Digital hardware came to mean lighter laptops and mobile phones. Ubicomp disappeared from the public eye for a decade.
However, it didn't actually vanish. At the edges, outside of the mainstream consumer electronics and personal computer worlds, using small processors to create interesting behaviors became increasingly popular. Adding a cheap processor and some clever mechanics in a $15 plush toy let retailers sell Tickle Me Elmos for $35. Toy designers did not think of themselves as being in the computer business, because they (and other groups, such as car designers) used information processing tactically as a way to differentiate in a competitive market.
Now, mainstream ubicomp is coming back. The success of Internet services on mobile phones demonstrates that networked products can stretch beyond a laptop browser. The prices for CPUs have fallen below a threshold where incorporating them becomes a competitively viable business decision. Research labs have developed new technologies for embedding information processing in virtually anything. New businesses, such as FitBit, and Green Goose are based on the fact that processing is cheap, and you can include it in anything.
The idea of a single general-purpose "computation" device is fading into the same historical background as having a single steam engine to power a whole factory, or a single electric motor to power every appliance in a house. As it fades, designers and developers have to learn to design smart things that serve the interests, abilities, and needs of people. We must create a practice of ubiquitous computing user experience design.