The magic of this, the one where you smile and nod knowingly at Tim Cook being the CEO, is that it doesn't matter to Apple whether the newest iPod touch or the iPad mini catches fire in the marketplace: nearly all the parts that matter could be exactly the same.
We potentially have an answer to the eternal question: how does Apple make a profit on a tablet at $250?
Economies of scale, the likes of which we have never before seen in the computer industry.
Even if the iPad mini is an utter "flop", and sells no more than a couple hundred thousand units, the manufacture and assembly of the key components are subsidised by the iPod touch.