I can't just arbitrarily dismiss your points, because they have general merit. $200 does "feel" like a magic number for an upper limit on handheld devices. The problem is that right now no company is going to get the power of the N800's successor down to that price point. Just flat not going to happen any time soon. Not because they won't, but because they can't. Now, if you want to argue that they follow the PS3 or Xbox 360 model and seed the ecosystem while taking a beating on margins, well, you *would* have a point-- except that there was already an ecosystem in place for games... Microsoft, Sony and others have always merely advanced the state-of-the-art rather than really inventing anything new (since the Atari 2600 that is).

Nokia's dilemma is having to create everything: device, core software, much ancillary software, (some) sales channels, etc. There's a chicken-and-egg scenario that prohibits a loss-leader approach that can be made up via software sales-- especially given the Open Source aspect. Now, financial gain can be realized via services, but again, that ecosystem is still too immature. So Nokia really has no choice with this product at this point than to sell it at or near current price levels.

Another point to consider is that price bands do overlap, and consumers generally have no problem with this. True, low-end laptops approach the N800's price but the form factor jumps drmatically. This is where the consumer says, "nice... a significant percentage of laptop power but in a smaller form." Someone like me, and obviously many in this forum, sees the benefit and judges the price overlap to be fair. If the N800 were powered-down to be cheaper, however, even the form factor benefit starts to lose its luster... especially since there are competitors all too willing to fill the void. And along those lines, if the price overlap were truly an issue, Pocket PCs would not be selling.

Sorry for the post length.