Tech. angle is not factored in, you'd just need to ask a clued in hardware engineer what is going to happen to the hardware that drives these form factor based devices in 5 years and he will tell you quickly and loudly.
"The prices are going to fall through the floor."
why? because the components will become commodity very quickly...even across different devices much of the chips, memory and SCREENS are going to become mass produced baked out items that suppliers like Samsung make and sell to whoever wants to pack them into a pad device. Amazon being the latest player to he space.
How does this help prices fall? Easy, the costs of production are amortized over all the people putting them together...the suppliers quickly recoup expensive fabrication facility costs since they have multiple profit lines coming in from their customers...all of which are one time payments with no restrictions other than defective unit agreements. So once fab. and R&D costs are swallowed these components will fall in price but that's what we've seen as standard for 30 years in electronics for IT. We saw it with the PC when the clones were manufactured by many suppliers using the IBM architecture as a common template, reducing costs for builders significantly and enabling competition to crash prices downward. Allowing the PC (and not the arguably better designed Mac, Amiga or Atari from a UI perspective) to win the computer wars of the mid to late 80's.
What is different here is that PC's have no natural limit on the needs of the machine. A desktop could continually be improved with better graphics cards to do CAD or GAMES over just web surfing, audio to do music over just play games, SCSCI addition to enable scanning and other add on's. This kept the 'form factor' of a PC dynamic as really there was no form factor...it was matched to whatever the needs of the user were. So there is always a "high end" pc for various things as there are always high end components that serve different needs.
Now refocus your gaze on a pad device, these are precisely restricted by their physical use conditions and that places on them necessary and desired hardware limitations that constrain costs downward in a whole new way once volume production picks up. A 7" pad is always going to be a 7" pad...it will serve mostly the use case of being used to read digital versions of books, play games, watch films and web surf. It will do nothing else (maybe some crazies will add a radio to it for some reason but that will not be a major use case for that form factor). The same is true of the 10" accept it's use cases open up new areas...such as good size for a digital tablet for drawing, or as a dashboard replacement surface for controlling some device remotely...none of these uses though require any more horsepower than devices have today so they are more application driven than Pad internal component driven. So what will happen is once Screen resolution has hit "retina" equivalent on both form factors (and that is already a year away for both sizes) screens will *not* need to get any better. superAMOLED (the best overall screen tech. in this engineers opinion) is improving power utilization and thinness and weight but those are subjective qualities not ones that improve visual quality. Once the tech. can do super high res. the consumer will be happy and the cost of production for each panel will fall to near nothing (ie. base raw materials and production costs + profit sliver) once the suppliers have recouped R&D costs. Since the form factor is fixed and people will be refreshing devices world wide periodically screens of that size will always be in similar demand (or at least at a predictable demand correlated with the replace rate and the growth of adoption in various markets). The same will happen at the 10" pad sizes...how the makers will likely eek out more profit is by offering larger panels for other reasons (um...tv's) or different types (flexible, transparent...etc.)
I blogged about why I felt OLED was going to be the LAST great display technology here those interested can click through for those reasons.
Now , display is not the only component of interest to pad devices...the brain and graphics chips are also on a road to commodity once a given processor core count and speed is fast enough to perform many actions nearly instantly *there will be no need to make them any more powerful for the given formfactor* costs will again crash as those parts become commodity and retain a permanent profit line for devices that are optimized by those component specs. for processor. Memory as well, will be constrained but I predict will be the largest factor of price variability for all pad devices because memory requirements vary with application use not form factor.
Battery technology is about to see a silent revolution, recent advances in being able to increase the charge surfaces of batteries by orders of magnitude make the promise of hyper charging batteries in only a few years ...just in time to go into super thin, super line pad devices. People will always want more power but once you get to a device that runs continuously for 4 or 5 days and when it does need charging can be charged in 1 minute instead of 3 hours...well the game has totally changed. We are going to see such devices within 5 years.
So the devices will be ubiquitious and extremely cheap fairly quickly...if Android has many devices in the hands of consumers using their other services they are happy to take an early loss. It beats watching Samsung and others fill that niche while Apple continues to grow, as production costs fall they can take their time reducing prices and thus rake in a great deal of profit on the long end, the future and a little appeal to what the constraints of the hardware are will bare this out.