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An existing product of their own would constitute competition. So it's not inaccurate what he's said. But I agree, it could have been explained more clearly.

unless they drop the price of the iPad 1, similar to what they do with the iPhone.

It also gave developers a ton of time to adapt their apps to the new form factor. And obviously provided time for new apps. That's huge.

The Osborne effect. I would think Apple and all other current/successful tech companies have this in mind re: their products - especially given the rapid turnover.

http://en.wikipedia.org/wiki/Osborne_effect#The_Osborne_Myth

* If they announced the new iPad now [and not release it for a few months] iPad 1 sales would tank.

* If they announced the new iPad now [and release it in a "handful of weeks"] iPad 1 sales would tank. [and iPad2 sales will skyrocket]