Yes, Nokia (and lots of people) have been expecting the prices of laptops to fall. They are not attempting to compete with laptops on price.

This discussion about market is interesting. The market as Nokia and others see it is that the laptop market still has millions and millions of devices sold. Even if you aggregate all of the computers and Internet devices smaller than a laptop that can be handheld, the total is still so much, much smaller than the laptop sales that you might as well call the whole handheld thing its own market. But looking years out Nokia, Intel, Google and others see a shift towards more portable Internet devices where things like battery life, size and weight, and UI matter more and you can't just shrink down a laptop to get the best handheld computer. There is no clear design win yet so everything in that category still "competes" with everything else. Each has its own advantages and disadvantages. You have your UMPCs and similar, your OQOs and similar, iphone and similar Internet-optimized advanced cell phones, and the N800 (with nothing similar IMHO). My comments on how the N800 will fare against these is in my previous posts.