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The ipad doesn't really fill a need (anything it can do can be done done better by a device we already own; be it a phone, a computer, a reader, or a netbook) but stirs up gadget lust among many and is more convenient to use in a number of situations.
And they priced it low enough so that a significant number of people will say "what the heck, it is only 500 bucks, I want one of these". And come to think of it, with the right virtualization techniques it might actually be possible to turn it into a good thin client. Which, of course, means you have to have local or remote access to a real computer somewhere.
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