This is Apple definitely responding to high-end pressure from increasingly successful Surfaces in the same way the iPad mini was a response to pressure from the low-end by small Android tablets.

This is basically Apple saying "let's make a Surface with a bigger screen and do it the Apple way".

It's weird seeing Microsoft participate in it.

Other than size, there's not much that Android tablets need to respond to, there's already been large high-end Android tablets with great pen input (no angle detection, but they're all Watcom class).

What I think was most interesting here was the incessant pitch that this is a productivity device not a media consumption device.

For the full experience you're looking at:

$800 for the pad

$100 for the pencil

$170 for the keyboardcase

And we're in low-end laptop territory without necessarily cannibalizing their laptop business, but it fires shots across the bow of also increasingly popular Chromebooks which are around this price point.

Edit: for people confused, I meant a low-end Apple laptop not a Windows machine, which are much cheaper. This is priced to barely overlap with the bottom-end. The pricing ensures the two segments are partitioned.