Google Nexus 7 vs the competition
Not only should these two form factors be considered distinct, but in many ways they should be considered opposites. The big one is portable (home, office, coffee shop) and the other is mobile (absolutely everywhere).
Why little tablets will rule the consumer market
The key attribute of small tablets that will drive them into mainstream use is low cost. But the implications of why that will prove to be the case are underappreciated as a driver of massive adoption.
How low will they go? I think that over the next two years, the "sweet spot" range for 7-inch tablets is between $100 and $200.
Sure, we've seen lots of phones at these prices and below. But phones require wireless service, which brings the total cost of ownership into the many hundreds or thousands of dollars for the life of the device.
With small tablets, consumers will pay one very low price -- and they're done spending.
Wi-Fi is becoming far more ubiquitous now because people are using personal hotspots -- features that let several Wi-Fi connections piggyback onto a mobile broadband connection.
Buying these cheap tablets will be a nearly consequence-free decision. They'll be an impulse buy. People will buy several. People will buy them for their children. Children will buy them for themselves.
But the real driver isn't just that low cost means more people can afford them. Low cost means low material value, which will give people incentives to use tablets everywhere, all the time without thinking about them. They're a low-risk gadget to carry around. They're less likely to be stolen. They're easily replaced if lost or broken.
The smaller form factor also increases the locations and circumstances for using a tablet. It's both less conspicuous and also fits in a pocket.
For example, I wouldn't use my $500 iPad in the following circumstances, but would definitely use my $200 Google Nexus 7: The beach, in restaurants, at the movies (oh, calm down -- I'll shut it off before the trailers roll), while hiking, while walking around in disreputable neighborhoods, while on a boat, and so on.