What should Apple do - Scale down Mac OS X or scale up iPhone OS?

DigiTimesis reporting that Taiwan-based Wintek will start supplying Apple with touch-sensitive panels during Q3 of this year for a new product - but what sort of product will that be?

Wintek revealed that it is currently working with Apple to develop some new products, but it said it does not know what applications the new products are for. Wintek added that no shipment schedule has been worked out yet, but shipments are likely to begin in the second half of the year.

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The way I see it is that Apple has two ways it could go. The mainstream thinking is that Apple will go for a netbook of some sorts in order to take advantage of the current craze for netbooks. These systems would likely be powered by the Mac OS and basically follow along the lines of other similar devices, albeit with touch-sensitive screens.

A system like this would presumably run most apps designed for the Mac OS, given enough power and as long as the screen size was adequate (I've noticed with Windows-based netbooks that some apps - for example, Outlook 2009 - don't work very well at netbook resolutions). The problem I have with this is that it's too conventional for Apple. It's the road well traveled, and Apple prefers the to beat a path of its own. Another problem with a netbook is that this is a competitive market where profits are razor thin.

The alternative would be so form of scaled-up iPhone (either with without the phone part). An iTablet perhaps. A device like that is likely to be powered by a tweaked version of the iPhone OS. this feels like a better path for Apple because the device would be another one-of-a-kind, and as such could command a one-of-a-kind price tag, which is what Apple likes. Apps designed for the iPhone would likely not work because of the larger screen, this would be a small tweak for developers. Apple could have an App Store specific for the new device and grab revenue via that outlet as well.

Thoughts?