Yeah I bet the way Apple would do it is to remove the controller and make it all touch-screen. More real-estate for viewing that way. I’m thinking like a 10.9” screen with little/no bezel. They can probably compete with the highest-tier steamdeck in price that way, if they can get it around $550.
Seems unlikely IMO. Any such device would necessarily run some variant of iOS, which would mean it could only run the comparatively narrow selection of games from the App Store. Not many such games are really "asking" to be played on a Deck-esque form factor.