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Impressive, though some of the machining around the various ports looks a little naff.
How is this - or is it - legal?
Your question is confusing. Are you under the impression that Apple has somehow gained legal protection for all aluminum clamshell laptops of a certain colour scheme?

It's a laptop. Why wouldn't it be legal?

On a vaguely related note, the plaintiff lost in both Apple v. Microsoft (35 F.3d 1435) and Lotus v. Borland (516 U.S. 233). It would appear that you can neither patent nor copyright Look and Feel.

It's not the clamshell design that's the problem, I think. I think it's other parts, like the charging apparatus.

The magsafe-like charging connector is pretty much identical in appearance to Apple's design. I would be surprised if Apple doesn't have an industrial design patent on that.

The keyboard is similar, but I don't think there's a problem, considering all the other Chiclets-style keyboards out there.

There is significant prior art around larger-than-Apple-magsafe magnetic-attach power connectors - if you ever used a Japanese-made domestic deep fryer in the 80s or 90s, you'll have noticed the same concept. Design IP is a different matter of course.
I think Apple could easily win a tradedress lawsuit against this device. It's not legal to exactly copy the design of another manufacturer.
It's probably not legal, but Apple's options to stop it are limited.

If Apple really wanted to, they could probably get an import injunction against these devices like they've done with HTC and Samsung over phone IP issues (with varying degrees of success: http://www.pcworld.com/article/257109/samsung_htc_spar_with_... ).

Then it'd be up to the customs office to actually catch shipments of these into the US - with HTC and Samsung, it's easy, as they properly declare the contents of their shipments and try to remain above-the-level. With Chinese sellers shipping individual units to US buyers, it's unlikely a customs officer would notice or care - just another random electronic good marked as a "Gift: Electronics Item" on a custom form.

Apple could also try to prosecute the manufacturers in China but their success in that endeavor is highly unlikely.

So basically, it isn't legal, but don't expect that to stop these devices from showing up at your door if purchased from eBay and other online sellers.

Note that the quoted price is wholesale, in units of 500.

It's a 1.2GHz single-core Cortex A8 (not A9) with 1GB of RAM and a 1366x768 display. The article states 8G of "SSD" storage, but at that size and given the feature sets of these SoCs it's much more likely to be a SD/eMMC device. Frankly this is going to be a very poor laptop replacement, but as a browsing/messaging box it might make sense.

And of course it looks exactly like a Macbook Air.

How long until someone installs OS X on this?

I've been running 10.5 on my Dell Mini 9 for almost 3 years without a single problem. I'd love the bigger screen.

OS X doesn't run on random ARM SoCs.
OS X doesn't run on ARM at all. iOS might, with a ton of hacking, but as far as I'm aware that hasn't been demonstrated by anyone yet.
With 1 GB of RAM and 8 GB of storage, I don't think installing OS X on it would be very beneficial.
Does OS X support ARM yet? If I remember correctly iOS devices use ARM and iOS is a fork of OS X. Still feels kind of distant you would be able to install it.
$149? That's cheap. You get what you pay for: According to the article, this thing has 8 GB of storage.
the device's build quality certainly isn't up to Apple's standards

That sounds like a huge understatement. A good phone is $500, so I'd expect an ARM laptop to have a similar price. For $150 they must be cutting a lot of corners.

I briefly read what you typed as something like you would cut yourself on the corners, which also may well be true!
In Chinese Air clone, corners cut you.
Look at the bill of materials teardowns for recent Android phones. Many of them are around just $200 in parts, with many of those parts unnecessary in this larger form-factor: $40-80 in radio parts for voice/3G/4G, the touchscreen tech, gyroscopes and other sensors, front and rear cameras, and having to pack it all onto a much smaller board.
If it ran Linux, I'd be all over it, but with Android, I'd much rather just use a smartphone or a tablet. It's essentially a tablet without a touchscreen as-is.
A great deal of the Linux userland is available. On my Arm based phone, I can vnc into an X windows session on the same device.
Why, why, why? Why do people want Android on a non-mobile/tablet device? It's not designed for a mouse, arguably not even for a keyboard...

Ubuntu would rock on that thing. Okay, maybe not Ubuntu, maybe something a bit better tuned for 1GB of RAM, but still, this would be fun to have for $150.

Also, are those ports empty? ha, Or at least, what is the port that is analogous to the MBA's Thunderbolt port? I don't recognize it.

edit Actually, I'd definitely get down with Chrome OS on this. Is there a usable ARM port of Chrome OS?

Android from Honeycomb on is quite nice with a mouse/keyboard combination, particularly if the "mouse" is really a multitouch touchpad.

I use my ASUS Transformer in that configuration more than I use it in tablet form, and I find that both the hardward keyboard and the touchpad work perfectly fine. The real downside isn't the OS support, but the app selection. There are still far too few apps built assuming that some percentage of the userbase will be using richer-than-touchscreen-only input methods, but this is beginning to slowly change as more full-featured office apps and IDEs are starting to appear.

I don't think it has anything to do with what people want. Getting Android running on this hardware was easier than getting Ubuntu running, so that's what they did.
Is that a mag connector for the power? I didn't think anyone but apple could use that.
Ripping off the MagSafe or not doesn't even matter. They clearly didn't ask Apple for permission for any of this as this has illegal written all over it.
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>looks like a macbook air

Oh the Apple lawyers will be pissed about that.