Earlier quoted context omitted.
They're really not. My dad knows what an iPad is. Unless this device lays golden eggs he'll probably never hear of it. Also, there are unmentioned features in the iPad's favor, most notably an App Store with 200k titles in it.
So your dad never browses Wal-mart, Target, Best Buy, or anywhere else? This is in the netbook range Best buy will throw next to the check-out aisle.
It'll be the same with these two tablets. People may buy the $200 thing because it's cheaper. Some (maybe even myself) might buy it because it's hackable. But nobody who wants an iPad will buy this instead, therefore they don't really "compete" by any meaningful usage of the word.