Yes, the PPI is wrong, at 1280x720, a smaller S3 is about 300 and the Note II about 264, so it's a misquote.
People are buying phablets because they don't want to carry 2 devices, a phablet replaces both a phone and a tablet, so one device to rule them all. And with accessories starting to pop-up that make use simpler (like smartwatches that show you messages, missed calls and such), functionality is even better.
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