In some cases yes, take the PSP's little screen for example. Right now it seems the biggest draw is to watch music videos on the screens, but more movies are coming out for PSP and will probably follow suit with iPhone. The biggest effect little screens will have can be seen on the web and browsing with cell phones. In a few years cell phones will surpass the most common tech items per home (tv's, toasters), and more and more of these users will be surfing the web on their phones. Not so much doing major surfing, but small things like checking emails and looking up info will be much more common.

The thing about the iPhone that will set a lot of companies up for disastor is that other cell phone manufaturers will start reformatting their screens also, but the majority of sites on the web aren't even close to being compatible with cell phones — even major ones that are currently being browsed a lot.