The RIM guy is a complete idiot. He says he "knows" 7 inches will be a big portion of the market. Only an idiot thinks he can predict a market with 100% certainty. And only Jobs actually seems to be able to do it.
It's very irritating when someone speculates and confuses opinion with fact. He doesn't know anything of the sort.
Apple doesn't want that bottom-feeder market, but it might come into being anyway. We'll see. Jobs always wants to make an appealing product, and doesn't want compromises in it, even if it would hit a price point that would make Apple more money. This might be an instance of it. I personally can't imagine using a puny 7" screen, but, that doesn't mean everyone else will hate it too.