With a bluetooth headset, it could compete in the smartphone space for some demographics. There are also people who would use it simply as a tablet, without having to worry about being close to a wifi hotspot, or at customer/client sites where you don't want to go through their network. However, for people who already have an Android phone and tether a Nexus 7 to the smart phone, there may not be a lot of desire to get a second data plan instead of tethering. At least until wireless companies come up with more reasonable plans.