A mid-range phone has more than enough CPU, RAM, storage, GPU to do everything 99.9% of consumers need to do: browser, email, word, excel, Candy Crush, even Fortnite etc.

Just plug it into a USB-C monitor, plug a keyboard & mouse into the monitor & voila all your issues with sharing a computer and syncing your documents have disappeared. Along with time & money cost of maintaining multiple computers.

So why has it failed? It's a chicken & egg problem.

The available solutions aren't polished enough to be suitable for the mass market, and the market isn't big enough for all of the app providers to polish their app to seamlessly adapt between such disparate UI paradigms.

Normally, tech goes through the bleeding edge. Early adopters put up with the lack of polish and provide the early market for development of that polish. But the phone as a single unit of computing isn't suitable for the bleeding edge. The bleeding edge is pretty much the only place that needs specialized devices.

Chromebooks had a similar issue, but found their path to market through schools.

What is the phone as computer breakthrough market going to be?

I see two possibilities, there are probably others.

1: Apple. I'm confident that Apple has prototyped this out and then deemed it "not ready yet". If/when they do it, it will be polished from day 1 and would drag app makers along with them, solving that chicken & egg problem.

2: Businesses. I could easily imagine several large businesses targeting their in house apps at a phone or phone-like device that can plug into monitor stations.