How about someone who reads ebooks. They can have one device that serves as their phone and ebook reader that they can have with them all the time.
A 3.5" phone just isn't practical for reading ebooks.
Ebook readers want the largest screen they can fit in a pocket. And this does fit in a pocket easier than you think.
It weighs 180grams which also makes reading ebooks very comfortable compared to say holding an ipad weighing 600g. Anyone who reads ebooks a lot will tell you the ipad gets uncomfortable to hold for long periods. This is why dedicated ebook readers and mini-tablets sell.
With the stylus, I can see people who draw ideas loving this. Quick and accurate drawings like you would do on a paper notepad can now be done on the Note because it is always with you in the pocket. No need to make a photocopy of sketches on paper for other people, just email it or bluetooth a copy to them.
Portable applications requiring the capture of signatures is also well served by the Note. Couriers, Salespeople, Restuarants. Trying to get a signature on a capacitive tablet screen is ridiculous. It doesn't work. The stylus is needed.
It is the Swiss Army Knife of portable devices. It is the ultimate pocketable all-in-one.
As someone who owns an iPhone but not an iPad, I can attest to the difficulty trying to read an e-book on the thing. However, that is not what it is designed for. The "Steve Jobs" idea of computing is to have an:
iPhone <> iPad <> Mac
Or in generic terms:
SmartPhone <> Tablet <> Computer
Given that there are already many reasons one will still need a "real" computer, or at least a tablet on top of a Phone, in your example it comes down to where you want to read your ebook: on your phone or on your tablet or laptop.
I specifically know my answer: Recently I bought a PDF of a long book - Obviously from a visual-standpoint it was easier to read it on the netbook than on an iPhone. But keep this in mind: after decades of fine-tuning in the book industry, the accepted smallest size of a paperback is still larger than any smartphone, including the Galaxy. Furthermore, I found that in situations where I could not carry the netbook, I did not have much time to read anyway, and the iPhone was quite adequate for short reads. (It was a great book that I read everywhere.
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In regards to a stylus: I know that Steve Jobs was very against it his entire life. While there are specialized fields such as animation or certain video-games (think Nintendo DS) that can make use of a stylus, I do not see the need for it for most people. While the work done in animation-studios using applications like Maya with a stylus is mind-blowing, that is a small niche market. Stylus/Tablet PC's have been around for years - with stagnant sales. (Most of the time I only see co-workers using them to show-off, but not for any practical purpose.) As far as writing with a stylus: Whenever I checkout and sign my name on a stylus-based signature screen in a store, my handwriting is beyond terrible. In addition, even if they perfected a Newton-like handwriting recognition tool, many studies have been done proving that typing was shown to be far faster than handwriting. (In one particular test I have in mind, they had a case-study of many volunteers of all ages and abilities write a paragraph in several different ways. The fastest mode of input was the business version of Dragon. Old-fashioned pencil-and-paper came in dead-last...while this is not a plug for Dragon, I think with Sirri we can see where Apple is going with these technologies....)
...Oh, and just yesterday I "signed" my eFiled tax return without a stylus...
I see the future fast approaching where we hone in on the most efficient ways of communicating with our devices, from ubiquitous Star Trek TNG-like touch-screens to HAL-9000-like voice communication.
I suppose there will never be a "one size fits all" answer to all of this, a fact that demonstrates the beauty of a free-market. And there probably will be a niche market for something between a phone and a tablet. However, I believe in the model in which most people will have one pocket-sized iPhone-like device (or how about a Leela/Futurama wristband?
,) one iPad-like tablet device, and some type of powerful full computer. (I will not go into my opinions on that end...I have already rambled long enough.
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Edit: I just thought of something...please do not think I am sexist, but if I carried a purse on me, I think I would be interested in something larger than an iPhone but smaller than an iPad. However, since I carry a backpack (if I have anything at all on me,) the iPad is the perfect "middle" device for me. I still agree with the overall pattern for personal computing devices for the near-future, but I suppose this exemplifies why "one-size-fits-all" does not always apply...
