$695 is still way too high.
There are many ways to set price. There's a range between cost (nobody will build it for less) and the maximum value someone can get out of it (no point in buying something for more). You don't show in any way it's outside this. The real question is the value that you can get out of it. That's what should decide how much you can pay for it. You need to compare it with other similar devices, not a bunch of non wireless enabled development boards.
In my view the device is new, but the fundamentals of the value are something we have seen before. I guess there are three devices to look at; OpenMoko, the Nokia N900 and the Nokia N9. There are a bunch of things which would work on those devices which are impractical on other devices. Here are some ideas off the top of my head; maybe other people can add theirs:
- Normally your WiFi and other power consuming parts are off; when the phone detects that it arrives in the base station near your home (requires low level device modem access; was implemented on N900) then it turns on the WiFi, forwards your mobile calls to your VOIP account and turns off the mobile network.
- You can trigger shell scripts when you enter locations - backup and copy media at home;
- All your security audit tools - nmap / nessus / etc. can be installed
Compare these ideas with the closed competition. Windows phones, where you can't even really jail-break, are the worst it is true. iOS phones are also pretty limited (software from the app store only unless you get a developer key) but even Android phones which are supposed to be "open" end up as garbage here. Instead of having the full GNU/Linux you are limited to just small bits re-implemented by Google.
If you want to develop new personal device or wireless network ideas, this is going to be worth thousands of dollars to you. Even if you just want a device which does what you tell it to then it's likely to be worth hundreds more.
If you aren't a developer; you don't have any ideas about how to do something with wireless devices and you don't need a portable computing device, then you may well be right, it's not worth it to you. For a person who just uses it as a phone/PC, the competition would be something like a Samsung S4 - on sale for something like $600. In that case your questions about the level of testing would really matter. For most of the people who read this site, though, it's a chance to get a device which will be able to do things no other current device can do and that can really be worth much more than Canonical are asking for it.