The dollar amount people are willing to pay needs to go up if developers are expected to invest the time required to develop high quality apps. Prices in the app store are generally lower than they are for apps on other platforms.
but isn't that an interesting contrast with the argument that in today's economic circumstances, apple's hardware has to get cheaper if it's to remain competitive! i know, software vs hardware, etc. but pricing's a tricky thing. I'm afraid that only in hindsight will we know whether apple's pricing decisions are prudent. Wednesday's analysts call should give some insight on the hardware side.
Having said that, I see the opportunity for a slick apple device that would compete successfully with netbooks for meaningful market share.
It would be slotted between the iPhone and macbook in both price and size, but might perform almost all the functions of both. I don't think such a device would take much marketshare from either product, because netbooks seem to serve best as second computers, more convenient than laptops for trips but inadequate as an only computer, and too big to be a phone replacement. (There's nothing wrong with overlapping functionality: haven't you ever been sitting at your computer and wished you could dial a phone call and have your conversation thru the laptop's speakers and mic, without leaving the keyboard?*)
*--My seeing this as an unfulfilled need may reflect my ignorance. Maybe skype or somesuch does this. Or can you connect via BT your laptop and iPhone and achieve this functionality? I know there's iChat, but wouldn't a direct phone connex be nice, with video maybe served by the computer? The whole point of the in-between product ( i don't think apple would consider it a netbook, though it would compete in that space--maybe an 8-10 inch MBA? or a tablet with keyboard?) is that achieving the broad spectrum of functions of both devices would be made apple-simple for the user, and not requiring workarounds. If, of course, they include copy-and-paste.

Introducing the first mainstream video phone service to the masses wouldn't hurt such a product. (I do think a mini-MBA could hurt MBA sales, based on my impression that most MBAs are used as second computers.)
What do others think? (Like i have to ask, on this forum, right?!)