Well put
Keep in mind that part of the success of the iPod was that it was dead easy to use. Senior citizens with absolutely zero aptitude for technology could figure out how to use it and how to get music onto it. It wasn't cheap, but it didn't feel cheap and was a great design: simple, looked good, and felt good. Apple went into the market and ran roughshod over, first at the high end and then into the less profitable low end, with iTunes and the iTunes Store as its secret weapon.
The phone and tablet markets are different, but I suspect Apple's approach -- making the whole widget to provide you a solution -- may work here as well. The PC is about the only consumer electronic device I can think of where you don't get the whole thing from one company. Microsoft makes the software, someone else makes the hardware, and the enhancements/applications are made by MS or third parties. Using PCs always feels a bit half-assed to me, whereas Macs, whatever their shortcomings, at least have reasons behind the shortcomings. I might disagree, but there seems to be a logic there rather than a hack.
We'll see how it plays out, of course, but I suspect that Google made a mistake here. MS took a few years to get the idea of hardware/software down in the previous decade ... and even then, they have a high return rate on things XBox and the Danger fiasco ... and MS had been making customer-facing software for a lot longer than Google has.
Either way, I'm grabbing some popcorn and an adult beverage. This should be good; certainly more interesting than baseball or NASCAR.