An AR device would replace the smartphone. Eventually the devices would be just about the same one. But a sleeker more productivity focused AR device would replace the phone outright. While VR would be left for work, gaming, and more involved entertainment applications.

Productivity would be the first big factor in adoption I think. If it can replace multiple monitor setups and allow you to interact and work more efficiently then it will be used.

The ideal version of VR is one where you don't have to move your body at all and you are no longer limited by it or your physical space. The VR we have now is really good, but early stages compared to where it will be in a few decades. I think a big leap in the short term would be very good eye tracking. It will allow for higher fidelity on same hardware and it opens the door to an incredibly fast human input device. Going forward you wouldn't need a mouse/controller to track and be manually pointed to where you are looking. You'd just need buttons and as soon as you look at something you can click the button and it clicks there. This would allow you to interact with menus in VR and extended pc desktop views at an insanely accelerated pace compared to a mouse or controller pointing. Using a virtual keyboard with eyes would be faster than now but still not as fast as a physical one. Voice to text could be utilized for longer typing sessions.

I think half the weight, double the resolution while pushing higher fps >=144, +50-100% the fov, eye tracking input system, and very comfortable to wear for several hours with no issue. I can imagine laying in bed and just working, or exploring the virtual net.

All of this working towards a full neural connection for input and output of course but that might be several decades away so no point in waiting for it. It's best to just make the best use out of what we have.