nope, 499 is an ipad 4 with retina
2 inches larger
Yep, and actually cheaper to produce. The iPad mini would need all the same hardware as the iPad 4, but it's got to fit in a smaller space with a
much more expensive display. Smaller doesn't mean cheaper.
For comparison (cost estimates from iSuppli)
iPhone 5 326 ppi display assembly: $44 [6.7 sq in] =$6.56 per sq in
iPad 4 264ppi display assembly: $127 [45.2] = $2.81
Nexus 7 216ppi display assembly: $52 [22] = $2.36
iPad mini 163ppi display assembly: $57 [29.6] = $1.93
Retina MBP 220ppi display (LCD+backlight only): $160 [106.6] = $1.50
Non-retina MBP 110ppi display (LCD+backlight only): $68 [106.6] = $0.64
The iPad mini's 326ppi retina display would cost somewhere between $140-190 assuming they could hit the same yields (which they can't yet). They'd be selling it for
at least the same price as the iPad 4, only it would also need a much bigger battery than the current mini, so it'd be a lot thicker, too.
the ipod touch has retina at the same thickness
THEY FREAKING HAVE THE TECHNOLOGY
The iPod touch is 1/5 the size of the iPad mini's screen. Backlighting that much area takes a ton more power and a different design. The current iPad mini would need a battery 65%+ larger with a retina display. That's a considerable bump in thickness.
The iPod touch with retina display has a battery of just 1030mAh. The non-retina mini needs 4490mAh. A retina mini would suck down around 7500. For comparison, the full-size iPad has an 11,560mAh battery.