I've got a pretty good idea that Apple is going to be releasing more iPod touch/iPhone platform devices. Why? Well, for one, they've said so in a job posting at the end of last year.
So, that "growing number of embedded devices" I think will be a ten-inch tablet. The ten inches figure I get from the three different reports out of China that Apple is developing a touch screen in the 9.5-10 inch area for release in Q3 (summer).
I don't think Apple is going to try to compete with the Netbook market directly. Apple has a big lead in touch technology and probably needs to innovate in other ways rather that release a similar type of product to a mature market.
The timing? Well, if this thing has to be put on a device in late Summer, Apple will probably want some software to run on it...probably even an App Store. If so, developers will need at least a few months to get their apps to run on this new little device. That means they should probably start right about now.
Then there has been the persistent "premium app store" rumors. Paying $20 for an iPhone app seems silly to me with so many great $5-$10 apps all around. But if an Apple tablet can handle hi res 3D gaming, it might make more sense. Current App Store apps should also run on it but in a resolution independence type of mode. This type of app would also be able to play on a new AppleTV OS with App store as well.
I think Apple's devices (even if not a tablet) will be based on the ARM Cortex A8 architecture like that of the Palm Pre. The video card will be from Imagination and will hopefully use some of that OpenCL Apple has been touting in its desktop Snow Leopard OS.
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