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More likely Apple's feverishly working on a 7" device but it wasn't ready to be announced yet. This is a recurring trope in Steve Jobs's speeches -- slag an idea as being unworkable or undesirable, only to announce it at the next major conference.

I'm not sure why you got downvoted for that. It's demonstrably true that Jobs has talked down certain product lines before releasing something in that field. Remember that post-iPhone joint talk with Steve Jobs and Bill Gates, where Bill Gates was all about the tablet-format computer, and Steve Jobs dismissed that, focusing instead on the phone?

When the iPhone first came out, third-party development was, in Jobs mind, to be relegated to HTML and javascript. John Carmack had 'a fairly heated argument' with Jobs that had him saying "I have an iPhone right now and it's a platform I would enjoy developing for but Apple is not taking progressing steps in regards to [gaming]."

I' sure there are more (better) examples, but I think it's a pretty safe bet that when Steve Jobs ramps up the negative rhetoric towards something, Apple is simultaneously testing and developing something along the lines of that thing being dissed.

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