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Got it?
If you say so... No vision.
If Apple doesn't update the iPad now, with a slew of Android tablets coming, how will Apple ensure that the iPad remains ahead of the pack in terms of capabilities? You see, the iPhone had a long lead because nobody at the time was doing what Apple was doing. But now with the advanced state of Android, Apple has no choice but to diversify the product line in order to remain ahead of the pack. Once Apple is perceived as being "behind", we have another Macintosh on our hands and developers jumping ship to Android in droves. Not good for Apple.
Android is not the threat, it's Microsoft with Windows 8. iPad 3 or Pro, will be a hybrid machine running Lion with an ARM processor. It will also be able to BootCamp or VM Windows 8.
Mac lost ground to MS because the Federal gov would only allow agencies to purchase Wintel machines after the Unisys fiasco.
He also said that he wasn't going into the phone business either. Year of the iPad 2 means that iPad 2 will dominate. It doesn't mean it will be the only iPad Apple releases.