Maybe Microsoft will release a 7" tablet. But they haven't prepared any developers (that we know of) for that size, with both Surface announcements comprised of 10.6" displays.

The important differences between Apple and Amazon in the tablet space are that Apple won't release hardware that's a dog. And they won't sell it at a loss. That's great for consumers and great for stock holders.

It also says that they haven't learned how these monster plastic-cased laptops have a half-life of two years.

Even the one Mac laptop that I saw over two days of advising was a 15" model, and not the new super-thin variant. This trend, assuming I'm looking at a decent random sample, says that Apple is in some trouble with the college crowd. Used to be you'd look up at a college classroom and everybody had a Mac. My sample, at least, says this trend might be turning. I asked one student about it, and it boiled down to price. Sure enough, Dell will sell you a 15" laptop "starting at $399". Apple doesn't go there. Sure, that Dell is slower (Core i3 processor, 4GB of RAM, 500GB hard disk), but it's still perfectly serviceable. They probably didn't buy the extended warranty.

One student was complaining that her Dell kept rebooting all the time "probably from my anti-virus software".

Sigh.

Dan, I noticed more or less the same. Our freshman students' own laptops are most times huge and one of the recurring reason (sometimes we openly ask) is that they want a "real gaming PC". Interestingly though, since they also receive laptops from us when they enroll, 30% of them ends up picking a Macbook over a Lenovo Laptop. I guess Lenovo laptops we provide are not "real gaming" enough, and Apple increases its appeal compared to that. My guess is that often college students want something that mimics as much as possible a desktop pc in terms of screen size, as they assume as Bitt said that they won't be walikng around much with those. But that's just me guessing.

Yes, my more realistic guesses concerning the $199 are:

* 7" SurfaceRT "Mini"
* SurfaceRT in basic cfg/packaging: no usb cord, no cover/keyboard, small SSD size, simple floppy plastic boxing, no manual, no cds, etc.
* SurfaceRT + some operator 2-year long contract.

Combination of the above.

Hahahaha- well to be fair I DO use a laptop for work and it is quite heavy duty and very powerful.

But at home I mostly just consume content, and for that the iPad is aces. If I was doing more stuff then I'd certainly need something more powerful, but it turns out most of my computing needs are consuming media (music, movies, books), surfing the web, email,and simple games. I guess I get my fill of heavy duty computing at work.

For work, I've got a Dell Precision T3500 with 3 20" widescreen monitors. For working from home (a couple of times a month), I've got a white-box Core 2 Quad with 2 22" monitors. For everything else, I've got my Nexus 7 and my Samsung Galaxy S3. I've not used my netbook for over a month, and my wife's got my 15" Samsung laptop.

From being anti-tablet (the £199 price talked me round to the Nexus 7), I've decided that you should just use the appropriate tool for the job, and I don't understand why people want a full-featured tablet at all. If you're that bothered about functionality and weight, get a MacBook Air or an Ultrabook.

And why not a Surface+cover/keyboard then? Light-weight+features is good, but only as long as screen+keyboard are permanently attached and you don't have real touch UI when you can benefit from it?

Because at $199, it's not going to be powerful enough.

I'd spend just as much, if not more, for a Surface Pro (x86) as I would for an Ultrabook or a MBA.
Just saying.

But I see what your point/assumption is.

Seeing as the Nexus 7 is selling at $199 at break-even, with a smaller screen and battery, the losses are likely to be significant; the cost of the glass and touch goes up at a rate worse than unit area increase.

Those BOM estimates were always hilariously low. Doesn't seem that any of the people in the teardown companies have ever tried making devices; things like the cost of the PCBs and flexes were always handwaved away when in fact they're serious parts of the device cost.

I've always assumed that was the case, good to hear it confirmed by someone who actually knows what he is talking about