If the iPad mini is aggressively priced, and it is basically a better, more capable iPod touch with a larger display, how does Apple's iPod touch pricing matrix adapt?

iPod touch price = (Mini - $100). iPad Mini =$249, iPod touch 8GB = $149. That might be too low - maybe $179?

Bottom end iPod touch bill of materials is probably just under $150 now and sells for $199. A new iPod touch, even if it only follows screen size for iPhone 5, would probably have a higher bill of materials. Apple could keep the iPod touch 4 on the market as the equivalent to the iPhone 3GS, and maybe suppress pricing even more.

However, Apple considers portability to be a feature, not a cost savings. So a smaller iPod touch doesn't have to be that inexpensive, they just have to clearly establish the message and value prop for both lines.

I agree with Rene that in terms of portability it can be looked at as, hey, for $199 you can get a portable touch or a bigger iPad mini. But, in terms of how a consumer looks at value, if the touch and iPad mini start at the same exact price, I'd think they double the storage of the touch from the mini. So you can get XGB for $199 in the iPad mini but $199 iPod touch would get you 2X GB.

Apple should say goodbye to the iPod classic, now's the time. The iPod nano has to have a price cut to keep selling, $129 is too much if a 'cheaper' iPad mini comes along.

iPod shuffle - $49
iPod nano - $99
iPod touch 8GB - $149
iPod touch 16GB - $199
iPad mini 16GB - $249
iPad mini 32GB - $299
iPad 2 - $399
iPad 3 - $499

I agree that Apple wouldn't have a problem selling the iPod touch for the same price as the iPad mini — two different products. But I would guess there will still be a gap between the at the base level. Maybe it's only $50 or maybe it's $100.

Have we totally ruled out the possibility of Apple adding a 3G radio to the touch? A pipe dream maybe, but an awesome one. Could Apple possibly back into a pay-as-you go, unsubsidized, data-only device? Would the carriers allow it? What if Sprint did to try and get ahead?

The carriers couldn't not allow it. How is an iPod touch with data any different than any other slate or phone with a data plan? If anything it would increase carrier revenue. Who is going to get rid of a cell phone for an iPod touch with no ear speaker and just VoIP calling, you know?

I would! Though I'd want it to be as fast as the top-of-the-line iPhone. And Google Voice wouldn't work (requires a phone line to do the call over). Also, yes, I'm an edge case. For now...

Biggest issue is fitting in my pocket, which the iPad obviously can't and I doubt the iPad mini will (maybe back pocket though). Though I suppose people do crazier things. Such as carrying around a Galaxy Note.

You're so edgy, Siegler. But come on you need to use a headset, etc. same concept as iPad... What if Apple introduces Bluetooth 4.0 with iPhone and iPad and you can take calls and get your messages on your iPad, though. That's more likely. Palm style.