But now, the economy of Shenzhen has matured to the point where squeezing every ounce of production is no longer sustainable, and thus is forced to innovate. Perhaps that explains the number of hardware startups there: it's an advantage to be closely located to the manufacturer of your parts. That was also once true for Silicon Valley.
Maybe the failure of many hardware startups now can be attributed to manufacturing jobs being outsourced.
I think the patent durations of hardware should be shorter, just like many here think that they should be shorter (if existant at all) for software.
Part of the issue with durations in hardware is development time. It would be nice if the duration could take into account the date of first sale rather than just the inception of the idea.
and, of course, as another reply says the software has always been a big part of the iPod.