Apple is great at covering the entire umbrella for any market it enters. What that means is for the iPhone and iPod the company offers a range of products across a range of prices (inexpensive to costly) to appeal to everyone. With the iPod, Apple created new products in the iPod Shuffle and Nano. With the iPhone, they used older phone models (specifically the 3GS) to offer a free product.
It remains to be seen strategically what they will do with the iPad to cover the umbrella, but the sure bet is Apple will. The reason for the iPad mini rumors is that Apple can’t really get anyone to subsidize older iPad models like they can with the iPhone, so that leaves making and selling older hardware at a loss or developing a new product, according to Ryan Jones at I Am Concise.