WIRED:Mobiles will be the PCs' poor relation until they are made open-ended, writes DANNY O'BRIEN

WHAT’S THE difference between a mobile phone and a laptop? Less and less, it seems. Netbooks like the Asus Eee are growing smaller, while phones are growing keyboards and higher resolution screens. There are perpetual rumours of a table-sized iPhone, and Google’s Android mobile phone operating system is being scaled up to run on mini-laptops: chip-maker Freescale plans to use it for a $100 laptop design.

Meanwhile, HP Mini Mi, Hewlett-Packard’s new netbook, includes a stripped-down Linux desktop interface that looks nonetheless remarkably like a mobile phone interface, with large icons leading to a set of web, instant messaging, and e-mail applications.

So will one eat the other’s market for lunch? And if so, which one should businesses be betting on? Your answer depends on a lot (your tolerance for text-messaging, your typing words-per-minute and the heft of your shoulder muscles), but it may mostly be influenced by your home country.

Here in Silicon Valley, the money is still on the laptop. Elsewhere, where mobile phones took to the streets far more successfully than expensive thinkpads and Macbooks, the phone is seen as the truly popular contender.

Try as they might, though, phones and PCs won’t truly merge until phones free themselves from the shackles of the telephone companies. That’s because there’s one simple rule that separates PC and phone. You can design a phone on your PC; but you can’t design a PC on your phone.

PCs are, as Prof Zittrain Law at Harvard University says, generative. He coined the term to describe the sucesss of the internet together with its PC endpoints. Its primary difference from what had come before, he wrote, is that the two combined are a generative medium: they make it easy for humble users to contribute and rapidly scale up their own contributions, rather than just passively accept what it has to offer.

That’s the power of a PC over a phone. You can do more than just send a camphone picture to your friends, or send a tiny clip of your night out to YouTube, with a PC. You can edit professional-level photography, or put together a professional radio show, or run a movie editing suite.

You’re given exactly the same tools, at a smaller scale, as those who are running YouTube or creating applications at Microsoft.

Now, the real truth, despite all the glowing reviews of “user-generated content” and “Web 2.0 interactivity”, is that only a tiny percentage of users ever take advantage of this generativity beyond posting a few comments on a news story or setting up a Facebook account.

But the percentage of “mere users” that do take their access to the net further is in the millions: 85 million in the United States alone in 2008, according to a recent study by EMarketer.

And among those millions are all of the internet’s billion-dollar businesses, from Yahoo! to Google to Bebo. Judging from the missteps of large corporations entering the net market, the majority of the net’s future hits will come from these small beginnings also. You start with a PC using the internet, and you end up being a reason why people use the internet. The net creates its own future hits from its current consumers: and that includes its own replacements.

Can one build the same business from a mobile phone as one can from a laptop? Well, every business runs via telephones, of course. There are plenty of entrepreneurs basing their entire infrastructure on mobiles in otherwise unwired countries – such as using SMS to discover crops’ market price.

But a mobile phone isn’t designed to let you write an application for a mobile phone on it. The iPhone’s software was designed on Macs, and so are the applications that run on it; the Linux that powers Android and its applications was written on the same computers that were supplied with Microsoft Windows.

This is not just a matter of computing power: this is about the end-use of the products we buy. A video-recorder just records video; a washing machine washes clothes, but a personal computer is built to be open-ended. We rewrite its functionality as easily as we load up a new program, or even a new website.

Nobody could describe the latest phones as just a way to talk to other phone users, but they are not open-ended devices. Telephone companies won’t let them be. Even companies like Apple, who made their billions in the open environment of computers, don’t relish opening up their locked-down iPhone design.

Perhaps one day PC and phone will merge. Perhaps one day the interface and flexibility of a mobile phone will be powerful enough for some smart user on the edge of the network to design the phone software that everyone will use in the future.

Hoping that the disruptive, insecure, PC will ebb away, leaving only compliant “digital appliances” like locked-down mobile phones that provide only for consumers, but leave no threat of future producers or competitors emerging, is a pipe-dream of phone companies. Sadly, it’s a dream that keeps their phones weak, and PCs all-powerful – for now.