One could also argue they are discovering a niche (developers who need to get on the go really fast, really often), so they're entering a tiny fraction of one market only. I guess it all comes down to perspective.
I think the problem is that this niche, is really only worth the maybe $10M that have roughly been given so far. The niche consists of developers, who are happy to produce all the apps they need for themselves (since the app market is at 0), they like Ubuntu (since this is really what they have now chosen to buy into, they want to give up their current phone and laptop setup in no less than 30 days max, and last but not least; is ready to shell out $800+ for a non-existing phone, that could be out of date by the time its in their hands.
To me that sounds like an incredibly tiny fraction of the smartphone market. If I were Canonical, I would use this as a survey, that tells you that you've got X amount of people ready to shell out $10M within 30 days of announcement. Surely the rest of the money could be earned from people who are aren't looking to change phone right now, and maybe wants to test the waters by seeing it in video reviews or in stores, and then pay the price. After all, isn't that what companies do? Take risks, and get rewarded if it works, instead of this extremely carefull investment (even Apple is more risky with its money for crying out loud).
I'm not sure if this is a real niche. For the device to be any use to a developer, you'd really need an external monitor and keyboard. So you're looking at a developer who for some reason can bring a phone places, cannot bring a Macbook Air or something places, and has monitors and keyboards available everywhere they bring the phone. Does this actually fit anyone's situation?
Maybe it'll become useful in the future with thin, flexible screens. You could carry your 21" monitor in your backpack and your computer in your pocket.
