Why is everybody calling it iPad3 ?
No "iPad 3" in 2011 ! Apple will just extend the lineup for a premium version !
Hell, iPad is so successful, that the HAVE TO squeeze it with a true premium choice! Right now there is just one Apple tablet device and nobody really cares how much memory or if 3G is inside. There is no true differentiator.
As other have stated here before, no way to phase out iPad2 just with holiday shopping season just ahead. No no never! Further pls avoid frustration among iPad2 buyers! So "iPad3" makes no sense in any way.
But: 'iPad 2 HD' would be perfect! 11" diagonal, doubled resolution, 200ppi, +15% screen edge lengths on +9% device edge length, same weight and thickness, same A5 cpu, slightly better cameras, same battery life as iPad 2. In fact this IS an 'iPad 2', just with better screen and cameras == 'HD'. This is by no means an 'iPad 3' !
And the price will be en vogue: No 16G model, starting with 32GB at 799$, that's +200$ compared to same iPad2. By far not everybody will want this nor need this, which is fine: It's perfect product segmentation! While Apple will pay +100$ for the panel, the customer will pay +200$. This is what I call a super profit premium strategy! 64GB 'iPad2 HD' with 11" will come close to MacBook Air 11" pricing: around 900-1000$. Yes there IS a market! It will not offend ANY of the 2011 iPad2 buyers, it will still be the year of the iPad2, in fact it will be THE year of the iPad 2 ! And the current iPad 2 pricing will not be lowered this year, as these babies still sell great.
2012 will be iPad 3 : same housing, 2 lines: 'iPad' and 'iPad HD', A6 processor, better cameras, maybe thunderbolt first on the 'HD' line. If the HD turns out to be too exclusive, then they'll add a 16GB 'HD' for 699 at the lower end but we'll see the current iPad(2) resolution to stay for some years, as they're sufficient for many, if not most customers. In no way will Apple discontinue/replace the current iPad resolution! They'll have to diversify ...quick! This fall...
They'd catch all the demand for more sophisticated visualization, especially graphics, design, art stuff who might otherwise defect to another platform. And it would add strong reputation to the iOS platform as a whole, kind of a 'flagship device' which doesn't need to be affordable to everyone out there (which no one will really ask for during 'big demo time'). Steve can always say: "Hey, you can get one for 350! It runs the same apps!"
That's my prediction on Apple!
Regards from Berlin, Germany from a true Apple addict..