Darryl Burling is answering this question in a series of articles specially thought for companies like Toshiba and Dell, blind enough to no see what the market is looking for. In his Part I, Darryl says:
"The UMPC is smaller than a tablet, but bigger than a Pocket PC, thus it overcomes the Pocket PCs screen size obstacle, and the larger form factor of the Laptop and Tablet."
And I would add to this comment that they will come with a price right in between those two categories.
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