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[1] 32GB model, no 16GB model in the iPhone5 form factor. At $199, you have to down to 16GB and step back a generation in tech. They clearly don't want people buying into the iphone5 form-factor at $199, no contract, etc.
Apple's growth is starting to decrease. They're no longer getting 100% year over year growth for iOS devices. Even Gruber assumed the 3GS would be available in poorer countries but it hasn't.
Apple is going to have to eventually find growth beyond the iPhone and iPad unless they're willing to lose subsidies for the iPhone or take less margins for the iPad to increase growth.
The growth trajectory of the iPad is unprecedented--100 million in 2.5 years.
Apple is smart about not getting into the situation of having to reduce margins on products--they use economies of scale to reduce costs.
Rumor has it that Apple is only getting ~25% margin on the iPad mini which is unprecedented.