Dell wants everybody to compare it to the Air but I think eventually it will be compared against the Macbook. To get into the same league as the Air you really have to get into the 3 pound or under weight class.
Definitely an odd choice for Dell to release a clearly inferior competitor in virtually every category imaginable. I thought there were typos when I first saw the specs and pricing released.
BTW, the only true competitor (or close) I've found in the PC market is from Lenovo:
http://shop.lenovo.com/SEUILibrary/...-category-id=FB7AF02917DF464B80B47A578BC9DD24
which gets you something comparable in the same size/weight class, but still with inferior 4500 graphics.
MSI is the one to look out for in terms of an MBA "killer" (from a price perspective).
http://www.liliputing.com/tag/msi-wind-x340
But likely it's going to be a very cheap feeling imitation of the MBA and with lesser graphics as well, but much less expensive.
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All in all from the research I've done, it seems like the MBA is still standing tall in a class of its own. In fact you might argue it's the one piece of hardware the PC world has had absolutely no answer for (overall quality/price/performance) in over a year.