I guess it all comes down to what you mean by "competitor". To me, that means a device that the sort of people who are likely to buy a Pandora would be tempted to buy instead. We know the feature set and price of the Pandora. So to be a legitimate competitor, a device would have to either offer (nearly) the same functionality for less money, or offer more functionality for (nearly) the same price. There are lots of less expensive portable computing devices, but they don't stack up in the features department. There are more powerful devices too, but they're a lot more expensive.
The Nokia tablets are great for what they are, but the N810 is ~$70 more than a Pandora and lacks some very important features (gaming controls, faster CPU/GPU, dedicated community, etc).
Nokia could make an n900 Pandora clone, but do you really think for one minute they would sell a far superior device in six months for less than their flagship model now? Moore's law doesn't work that fast. It's kind of a moot point anyway because I don't see Nokia cloning the Pandora, and anything short of a clone (or an improvement) is not going to compete for my dollar.
Umm well for one the discussion of n900 is hypothetical. But since we are at it, let me add my 2 cents.
Not very sure whether Nokia will be a serious competitor.
1. Note that Nokia has 2 OMAP24xx based tablets : N800 and N810. The N810 is fairly expensive and contains a GPS. N800 has the same CPU, screen and software but can be bought for around $220 US +tax + shipping. However nokia is discontinuing this model. It appears Nokia is more interested in GPS which adds significant cost. If the hypothetical N900 has a GPS, it will be more expensive than the Pandora and its target market will be very different.
2. N800/810 have terrible gaming controls. They simply werent designed to play games. A good controller is a must if you want to play games. The necessary CPU is there. It runs Linux. Has a SDL port. And has a great 800x480 screen. But no controls and that breaks the whole deal. The NES emulator on the N800 tries to get around by emulating buttons on the touch screen. But the lack of controls means that Nokia simply isnt interested in gaming on the platform. They are more focussed on their N-gage platform as far as games are concerned.