Steve Jobs a couple years back:
"Let's talk about the avalanche of tablets. First, there are only a few credible competitors. And they all have seven-inch screen. This size isn't sufficient to create great tablet apps. And this size is useless unless you include sandpaper so users can sand their fingers down to a quarter of their size. We've done extensive testing and 10 inches is the minimum tablet size.
Given that tablet users will have a smartphone in their pocket, there's no point in giving up screen size. Seven inch tablets are tweeners -- too big to be a phone, and too small to compete with the iPad."