David Sparks:

I think a 7 inch iPad in the $250 price range, along with the app store and all the other great things that Apple has built, would be devastating to competing tablet manufacturers.

Apple employed a similar strategy in the iPod market and the rest of the MP3 player market never recovered.

I don’t know whether Apple calls it the next generation iPod touch or the iPad Mini but the result would be the same either way, a lot of units sold to customers that would otherwise have gone to Amazon, Samsung, and others.