Currently codenamed S1, the device will have a 9.4-inch capacitive touch screen (1280 x 800 resolution), run Android 3.0, and will be powered by a Tegra 2 processor, according to "two highly trusted and independent sources" cited by Engadget. It is focused on Qriocity, the company's music, game, ebook, and video on-demand service that recently launched in Europe. The gaming tablet will come preloaded with Sony PS One games, and a Bravia Media Remote. It also features front- and rear-facing cameras as well as a USB-A port. The physical buttons include volume, on/off, and possibly a Q for Qriocity. There's even an IR port built-in allowing you to control other devices.
The tablet will have a "wrap" design that mimics an open paperback stuffed into a back pocket, or a magazine folded backward upon itself such that only a single page is visible. In terms of functionality, this will supposedly give the tablet's display enough of an angle to comfortably touch-type when placed on a table, make one-handed operation a bit less taxing on the wrist, and to reduce the torque that makes 10-inch tablets uncomfortable to hold one-handed for an extended period of time.
The target price for the WiFi-only version of the S1 is $600 with a planned September 2011 ship date. Remember, this rumor is still a very early one, so anything can change. The product may even be canned, but hopefully that won't happen.