Conflict? Sounds more and more like this is about *one* product with all those specs, not two separate ones. Which, to be honest seems like the more natural product progression.
Risk of cannibalization is a short term issue during platform changes and mobility is far more important than raw power for many, coupled with the fact that even an 11" MBA is quite a powerful computer today.
That is exactly what I was thinking all along. With rumors of a 12" iPad and a 12" MBA with conflicting details that don't 100% fit either... I am of the impression that these two devices are in fact ONE.
Think like Asus line of Transformer Tablets/Notebooks or the MS Surface Pro. But also not like these like at all... but in the typical Apple manner... that we, right now, just cannot predict.