Addendum: What I would ultimately like to see is a secondary, secure processor in cellphones; one with direct (muxed) access to the phone's screen and inputs. This processor runs its own OS, and is completely isolated from everything else except for a tiny communication channel with the main processor. When triggered by the main processor, it can take control of the screen and inputs to fulfill its functionality.
Now, to use it, you whip out your phone, launch the related app, and this causes the main processor to pass control to the secure processor where you are greeted by your password manager.
Better yet, the phone's browser could trigger it, and even tell the secure processor what website we wish to log into. Now the user just has to hit confirm/enter a pin, and the rest is handled automatically.
Not amazing enough yet? When plugged into your PC by USB/Bluetooth, if you've got the right software installed, even the PC's browser could trigger this.
Now you have all the benefits of a hardware based password manager, but you don't need a "second device."
Now, to use it, you whip out your phone, launch the related app, and this causes the main processor to pass control to the secure processor where you are greeted by your password manager.
Better yet, the phone's browser could trigger it, and even tell the secure processor what website we wish to log into. Now the user just has to hit confirm/enter a pin, and the rest is handled automatically.
Not amazing enough yet? When plugged into your PC by USB/Bluetooth, if you've got the right software installed, even the PC's browser could trigger this.
Now you have all the benefits of a hardware based password manager, but you don't need a "second device."