OEM's like "E Fun" could have been rushing to market with ARM based solutions - but instead they're using Intel. It's a movement that Intel has no control over. They can either participate and win, or cede share to their competitors. That's just a fact of life with these new devices.
Of course, the market will decide if a $179 PC with 10.1" display is actually sufficient enough to choose over a more fully equipped machine. Did you notice that it has only 1GB of memory, and just 32GB of on-board storage?
I actually think the route that Microsoft chose with Surface Pro 3 made a lot more sense. The 12" panel and engineering prowess of that machine is enough to open a new category of device. What I can't understand is why Microsoft can't figure out a way to build it for much less. I think the value of having a compelling device used by a decent share of the market outweighs perhaps the margin hit of selling the base model for, say, $499.
By the way - the actual base model is $799 and comes with only 64GB of SSD and a Core i3. And the keyboard/cover is sold separately (+$129). What they need is to trim $300 off that price, and include the keyboard/cover with it. I'd easily buy the 128GB/Core i5 bundle for $699 (down from $999), if keyboard/cover included. At these prices, I think it would generate huge demand - and be a lot more compelling than the "Netbook v2" device that you linked to.
What I'd like to see is more OEMs improving their industrial designs, and finding the sweet spots of price/performance/features - instead of iterating on old design methodologies. Intel almost had a nice thing going with Ultrabook, but it seems to have fizzled. In general I liked the design trade offs, but none of the OEM vendors seemed able to figure out how to build a nice design, and not charge $1299 for it. But now that PC sales are up, Intel seems to be like, "Ultra-what?"
News 
Market Data 
Discover 
