I'm not convinced. The iPhone screen is 3.5" so presumably this device would have 4 times the pixel count so, to maintain iPhone levels of performance (which according to various benchmarks would be about a 20% performance drop on the current iPad) would require a quadrupling of CPU and GPU power. That's a stretch in a single generation. I suppose that they could force graphically intensive games to run in a lower resolution but I'm not sure how they'd manage expectations on that one.
- Julian