We will see. If the business model is published content delivery (i.e. books, magazines, papers) then it needs to be a volume product in order to be viable. They need to sell it in closer to ipod quantities (v.high) than macbook (relatively low).
So as a check the "large ipod" option has...
1. £500 - affordable (x)
2. Does not cannibalise macbook (x)
3. Does not require 2nd 3G contract (x)
4. Existing app base (x)
5. High battery life (x)
6. Does not have the comedy value of making you to put a large tablet close to your ear to make a call (it can't do calls) (x)
7. Application and content delivery by Itunes (x)