Of the 4 major ebook platforms in the US, Kobo was the only one with a truly baffling interest in tablets. Amazon has always clearly been building a media tablet where they could sell you stuff, Apple is Apple, and Barnes & Noble's tablet efforts are showing all the signs of being a glorious failure.
But Kobo's tablets, on the other hand, have never made much sense. Their first 2 tablets (the Vox in 2011 and the Arc in 2012) were outdated the day they launched, and Kobo's third generation tablets were clearly overpriced when they were announced in August 2013.
At some point you have to start wondering why Kobo is still in the Android tablet market after so many missteps, but as I discovered while writing this review Kobo isn't actually trying to compete in the Android tablet market - not with the Arc 7, anyway.
Kobo has their own plan, and competing on price isn't part of that plan.
I had to get my hands on this tablet before I realized that Kobo designed the Arc 7 for a specific type of consumer: readers, and more specifically Kobo customers. If you're not a member of at least the first group then you were never in Kobo's sights, and so there was no reason for Kobo to try to make a sale by offering a super low price. This freed Kobo to sell the Arc 7 at a price point which enabled them to make at least some money on the tablet while still attracting readers and locking them in to buy ebooks from Kobo first.
P.S. As you are probably thinking, B&N tried a similar model but failed miserably. TBH I don't know whether Kobo will succeed where B&N failed, though Kobo does have at least one advantage (an international focus). And Kobo only adopted this strategy with the latest tablet. I'm still thinking about how this will affect Kobo's position in the long term; would anyone care to guess?