On January 27, Apple will likely introduce a new tablet product. For the past two years, rumors have been circulating the internet about what that device might consist of. Many speculate that it will be an “enlarged iPod touch,” running a derivative of the iPhone OS. Others suspect it might be a “tablet Mac,” running a stripped down version of Mac OS X. This “middle ground” area that lives between the laptops and smartphones we use every day is a brand new market, and many companies have been working hard over the past year to define it.

When Apple entered the smartphone market with the iPhone in June 2007, it was already a fairly mature market. Four years prior, Microsoft had launched Windows Mobile 2003, a huge release that offered a full touchscreen smartphone experience with multi-tasking, robust email and music support, and syncing for music and TV shows. That same year, Palm launched the Treo 600, a remarkable device that offered an incredibly seamless solution for consuming media, email, and other content on the go. BlackBerry devices had been offering a refined mobile email experience for several years. Essentially, the iPhone entered a market that was already defined, and brought new levels of media consumption and refinement to the table, while lacking real applications, games, copy and paste, multi-tasking, and MMS (features that have all been added besides multitasking, which is expected to arrive with iPhone OS 4.0).The tablet space is entirely different. Devices like the JooJoo, which offers a smartphone-like experience enlarged to a 12″ screen, with web browsing and HD media playback, are still attempting to define what a tablet should be.  Others, like the HP Slate, offer a full Windows 7 computing experience in a slim, multi-touch form factor.  Yet others, like the Plastic Logic Que, offer a more eBook-reader type experience, with an E-Ink screen.

Dozens of tablets were introduced at the 2010 Consumer Electronics Show, many of them running Google’s highly acclaimed Android operating system. The Dell Streak (also called Mini 5) was particularly interesting, offering a pixel-packed 5″ multitouch screen, with a GSM radio and phone functionality as well.

Where will the Apple Tablet fit into all this? Is there really room for an expensive and limited device? An $800 to $1000 device running a limited iPhone operating system is likely to have limited appeal to all but the most devoted Apple fans (then again, Steve Jobs’ kitchen trash may hold that same appeal).

Despite a slow start, the iPhone eventually caught on. Hardly anyone was interested in a $600 device that was slow, could not copy and paste, run third party applications, multi task, connect to Exchange servers, or play games, yet as Apple rectified the iPhone’s flaws, more and more people saw the value in this platform.

With Windows Mobile 7 around the corner at Mobile World Congress on February 15, Apple’s mobile products may face another competitor that has the advantage of popular services (Windows Live, Bing, Xbox, Zune, Exchange), capable partners (HTC, LG, Samsung), and better hardware. Windows Mobile 7 devices are purported to be carrying 1Ghz and up processors (including Dual Core), HD video recording and playback, and full Adobe Flash support right out of the gate.

Will Apple repeat history with their new Tablet (or iPad, iSlate, Apple Pad, etc.)? Apple has launched many successful products, but it’s easy to forget major flops such as the Mac G4 Cube, Mac Mini, Apple Hi-Fi, Apple Newton, Apple TV, and the buggy Snow Leopard. In addition, Apple’s already diminutive market share in the computer space dropped noticeably in 2009, indicating that consumers aren’t willing to pay more for a fruit logo in today’s economy. Only time will tell.