Some smart guys have noticed that “internally, the iPad looks more like a battery with a computer than a computer with a battery”:http://daringfireball.net/2010/04/the_ipad. This is a pretty fundamental point.
I remember back in my first job, working on automotive electronics strategies, someone asked me “how small can a CD player be” and to me it was clear — size would be dominated by the media and the controls, not by the internal electronics.
When we started buying PCs and TVs and cellphones and other gadgets, their sizes were dominated by internal considerations — tubes and motherboards and drives and power supplies and electronics and antennas and all kinds of crud. And we are still in the last stages of this — desktop computers are still big boxy things, many laptops are big chunky things. But thanks to Moore’s law, the electronics are in the last stages of disappearing, and with them the big clunky power supplies, and awkward big antennas, spinning disks, etc. The gadgets we carry will have their sizes driven by human interaction needs, and those damn batteries (getting batteries down in size/weight is a hard problem).
Which is why I think questions like “Which will win, the Kindle or iPad”, or “Will the iPad replace notebooks” are ultimately not very interesting. When gadgets all are lightweight and no bigger than they have to be, and electronics are basically free, and connectivity is ubiquitous, you’ll carry all kinds of these things around or have them in your house and not worry about it, just like we never worried about books vs magazines vs newspapers.