I agree with your observations. I can't speak for Kay but I think his comment to Jobs about the size was based on the premis that the iPad would be a production device.
The percentage of users that use computing devices primarily for something other than content consumption is pretty small. I actually think an argument could be made that phones are used more for productive tasks than tablets.
The percentage of users that use computing devices primarily for something other than content consumption is pretty small. I actually think an argument could be made that phones are used more for productive tasks than tablets.