Detractors like yourself have been saying that Apple has always sold inferior hardware at marked up prices. Yet, they have somehow found profit with such devices / equipment.
Don't get me wrong, I am not blindly supporting the current Model for Apple either. I totally agree with the opinion that the iPod model will not work in this case. Personally I wish they would scrap their rigid scheduled updates, and add some spice to the iOS world with new devices, with new features and a bit more openness.
Time to start thinking differently again, take changes with some products, and keep people on their toes!
I think they could drive the competition insane if they did this.