Probably just wishful thinking on my part, but I HOPE it's going in that direction. Maybe the iPad mini doesn't replace the phone in 2012/2013, but an iPad Nano becomes that in 2014 or 2015. Why? Who is the biggest barrier remaining in Apple's direct relationship with its customers? And when you think of your cell phone, who do you loathe to deal with in the process? The carriers, that's who.
Apple tried to break part of the model in 2007 with iPhone being unsubsidized. But people largely didn't like the price, even when a few months later they dropped the price to $399.
After the iPhone became subsidized in 2008 it took off like a rocket, because people love that carrier crack, and will overpay for service during a two year contract. But the iPad is completely unsubsidized at a great price. That is why Android has such success in phones, because the OEMs hide the true phone cost with the carriers in the form of subsidies, and exactly why they can't compete with Apple in the tablet space. (Yes the Kindle Fire and Nexus7 are now, but that is either at a loss or break even to get people locked into their ecosystems).
Beating the carriers is like cooking a frog. You start it on simmer and slowly ratchet up the heat, and it doesn't realize it. First the App Store. Then iMessage. Then FaceTime. Hopefully in iOS 7 or 8 we will see FaceTime without video (ala phone calls). Why not? They already have a few hundred million devices for calling between themselves.
So, I would like to think Apple will do the 4" form factor for probably another couple of years (change doesn't happen overnight), and we'll see a 5" or 6" in at that time that is the iPad's screen dimensions and runs iPad apps. Just as the iPad started at $499, now the mini at $329, maybe an iNano will start at $249. And all you have to buy is a data plan WITHOUT CONTRACT. The carriers will assume their roles as dumb pipes.
