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Early cell phones had to be large because of battery technology (size and life). The battery on my first Motorola Brick's battery was larger, and heavier than my cell phone today and only lasted 8 hrs in stand-by. It didn't take long for battery technology to surpass the "hard physical limits" of that time.
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Battery size was only partially the reason why early cell phones were so huge. Electronic things have shrunk significantly in 20 years in general, but tech geeks are acknowledging that a physical limit is being reached. While you can make a wire (for example) really, really small, and they are making them smaller and smaller, there IS a physical limit - you can't make anything smaller than one molecule thick <g>.
There is a clear point of diminishing returns with improvements in battery technology - these are improvements in _technology_, it is certainly possible that some _scientific_ discovery will be made to circumvent that, but that happens more often in Hollywood than real life
Battery technology did NOT surpass the physical limits of that time. Improvements were made in _engineering technology_. The fundamental laws of science haven't changed much (only, I admit, our understanding of them)
(By the way, "Steve Austin" the 6-million dollar man had an underwater breathing apparatus like that. And interestingly enough, as a plot device, they could not supply it with enough power without plugging it into his arm <g>)