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Disagree. You could have made roughly the same argument before the iPad 2 was released. No competitor was comi g close, so why bother improving on the original? Things haven't changed that much. The iPad 2 is still selling like gangbusters, so why discontinue it?
Because Apple likes to push the competion even further behind, that's why. By early next year, MAYBE Samsung will be close to an iPad 2 competitor. But before they can get any traction with it, Apple will force them back to the drawing board with a thinner, lighter, faster, higher-res iPad 3. And Apple is the only tablet maker that can buy cutting-edge components in such bulk that they can still make a nice profit on each one. Everyone else has to wait for prices to come down, but by that time they aren't cutting-edge anymore.
This is one of the reasons the Touchpad, original Galaxy Tab, and Xoom failed so badly. They were competing with the iPad 1, but Apple had already moved on to the iPad 2.