What price range do you think?

[WLS]

Your opinion is based on nothing whatsoever. My opinion is based on existing patterns. The iPod Touch is nothing more than a small-screened iPad, and its base model is 8GB. Apple clearly has no problem putting only 8GB in a current generation iOS device. iPhones are also the same basic device, and when Apple kept the last generation for sale alongside the current generation, they dropped the capacity to 8GB.

Now I admit that I am not necessarily any more correct than you, but at least my guess is the result of pattern recognition and carrying the sequence out to the next logical step.

I agree that 8GB is really limiting. The 8GB iPod Touch feels like a joke, and the 8GB iPhone 3GS isn't really for anyone that wants to use their phone as a full-featured smartphone. But both exist and are bought.

If Apple keeps the iPad 2 for sale alongside the iPad 3, it will be for one purpose only: lower price point. It will target the price conscious buyer very specifcally, and that buyer may not even comprehend what the real impact of 8GB means. They certainly won't care, and they might not even be buying the device for themselves. There is no reason at all for Apple not to put 8GB in it and keep their profit margin a wee bit higher since it won't impact the sales in the market it'll be aimed at.

I think your logic fails at a crucial point. The 8GB Touch is the base model as it originally came out. Eventually the storage was moved up but the base model was kept at a lower price.
With the iPad 16GB is the original base and things would move up from there. also remember when they did that the 8GB was the older hardware and the new Touch had the newer design and more storage..
I could see the iPad2 kept at 16GB and sold for $499 or $450 then the iPad3 32GB could be sold at $599.
That allows Apple to get more for the costly retina screen and the 16GB increase in storage. A 64GB version at $699 for yet another 32GB would seem reasonable. This deals at least with my main complaint with storage increases in the iPads which was going from 16GB to 32GB was only a 16GB increase in storage for $100. I am saying they could do that not that they would.
What they are more likely to do is just sell off remaining inventory and refurbs at a discount and introduce the iPad3 at the usual price points. If that is the case I will get the 16GB base model and just hold it for a year as I have been doing.