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Is it really usable as a phone? Seems like it would be a step back for any modern ios/android device user.

Depends on your use case. Yes, it's a step back in convenience (yet) but many steps forward in privacy and security.

I'll have to wait for those to get flagship specs before considering it.

Though honestly I'd probably prefer an android/ios device able to run a different operating system on the external display in all cases.