Free up radio communication from hardware-specific needs with software -- that's the dream of many an electrical engineer.
A software-defined radio (SDR) is a radio device where components that have been typically implemented as hardware (tuner, filters, amplifiers, modulators/demodulators, etc.) are instead implemented by means of software.
Think of a mobile phone that could support multiple cellular technologies and frequencies at the same time and can be modified in the future without any hardware changes. Apple's upcoming iPhone will likely support this model -- reducing the need to build separate CDMA and GSM versions. When mass-customization meets remote software update, we see Apple's profits shoot up (lower unit production cost = higher margins), and the flexibility of devices explode.
Near-field communications, for example, is a useful tool to enable consumers to make credit card purchases with their mobile phones, based on a chip embedded in the phone chassis. But what if you could use many vendors' chip readers, without supporting the actual hardware antenna and other components? That's the beauty of an SDR.
Around the globe, SDRs could boost mobile operators in less-developed countries. The flexibility to combine different grades of hardware and software to strike the right balance between cost and network resiliency would be more opportunities for more people to be connected, at a lower cost.
The U.S. Federal Communications Commission loves SDR -- such software-defined radios enable the sharing of limited airspace and prevent interference.