Finding that niche between smart phones and netbooks...

... Is going to be very difficult. CNET reports that Intel and LG Electronics: 

are working on a new class of product that are mini-computers that can also be used to make phone calls using a wireless Internet connection. Intel sees the category of product as something that is somewhere between a smartphone, like the Apple iPhone, and a Netbook, a scaled-down version of a notebook computer. 

This is happening because Intel sees opportunities for growth in the midst of the economic downturn. While mobile phone sales were off about 12 percent worldwide last year, smartphone sales rose about 22.5 percent. Intel doesn't make mobilephone chips (ARM, TI, and QualComm do, according to CNET). LG electronics, on the other hand, makes many different phones, a few computer monitors, and zillions of kitchen and laundry appliances. (They don't appear to make computers.) So, together they are envisioning a phone-like device that's a little bigger, a little faster, a little more usable than a smartphone, and REALLY popular:

Intel argues that consumers need a device that's more powerful than a smartphone but not as bulky as a Netbook or laptop. The idea is that consumers who buy a MID could use it to watch high-definition video, make phone calls using the Internet, or download information from the Web while on the go.

Now, the above are all activities that I do, reasonably frequently, on my phone, as per the CNET article: 

Not surprisingly, Intel's vision of a MID is exactly why many people want to buy a smartphone like the iPhone. 

The Intel/LG device will in fact make phone calls--via wireless when it's available. Which highlights the primacy of the network. I don't believe that my phone right now--a 3G iphone--is keeping me from doing much that I want to do (except, ironically, make Skype calls on wireless). A faster network, I know, will result in higher utility from my already-robust smartphone, and will also lead to more applications, more services, and more sophistication in both. Network quality (speed, coverage, reliability and cost) are the limiters of my experience, not the phone itself. 

(Oh sure, I don't like typing on the iPhone anymore than anyone else does. But I don't really consider it a productivity tool as such, I consider it an information and communication tool. A Web reader, etc.) 

And the CNET article makes an interesting point in this regard: 

So far, wireless operators have done a poor job of providing people with a single subscription for multiple devices. 

It's true of course. As the three or four main mobile telcoms fight over the smartphone subscriber markets, they haven't found much advantage to bundling 3G access for non-phone devices with 3G access for smartphones. I suppose that letting me use my iPhone as a 3g modem for my laptop might afford me some increased degree of mobility/communications, but hell, I live in Oakland, I can almost always find WiFi in conjunction with a cup of coffee.