Whether or not you believe the analyst from Digitimes over claimed rumours of a miniature version of the iPad, one thing is quasi certain, such a product may kill the iPod Touch altogether, something that Apple may secretly want to achieve.
Back in January, we suggested that Apple might want to kill the iPod Touch sooner or later as, as it turned out, the iPad is merely a glorious giant iPod Touch (again, something we predicted back in January 2009).
Now if the rumours are true, a smaller iPad is likely to be much cheaper than the cheapest $499 iPad. We already know that the screen and the processor account for nearly half of the component cost of the iPad itself with the screen making up to 37 percent.
A smaller screen and a generic application CPU (rather than the A4) will mean a lower total cost of manufacture. We're sure that Apple could easily shave another $60 off the bill and push the BOM under $200.
Given that the most iPod Touch costs $399, one can expect that the iPad Mini will have a starting price well under the $400 ceiling with the iPod Touch slowly fading away after more than four years.
Steve Jobs will want to have a platform that is homogeneous (cheaper costs, easier to develop, simpler marketing message and differentiations) and numerous signs (the iBookstore for iPhone, hardware use, the iPhone OS 4.0) point to something in that direction.
By the end of 2011, we can expect to have two distinct product lines, an iPod family either without screens or with very small screens and an iPad family which shares a number of features with the iPhone but with bigger screens.