I've been thinking about this a lot lately. It seems that hardware may be the New Way (tm). There exist some pretty exciting technologies for cheap, namely FPGA boards and SOC (system on a chip... and/or nano-itx). These make a very large portion of hardware design much simpler. We can suddenly apply software rapid development techniques to board design with the FPGAs. Further the SOC makes much functionality within a product just software development.

Further, there are many exciting "hobby kits" which make gadgets very creatable and testable, since they allow for easy plug-and-play hardware creation. This sort of thing makes prototyping very very easy, and the rest can be outsourced pretty well. Sure there are complications that I know nothing of, but I think there is an abundance of supply chain for a lot of projects, making small hardware companies totally possible.

A slightly different perspective on the above: I beleive there exists at least one market that can be exploited by putting together existing big components in fun new ways.