Image processing
I don't think the main challenge is processor power these days, although that is an issue. The really hard part - still very much in the research area - is making sense of the image. These days, smart phones and cameras can detect faces, for example. But, there's a lot more you want these devices to be able to do - to match human image analysis and even go beyond. I expect rapid progress to continue in this area, but it gets into hard AI.