7" iPod Touch Makes More Sense than a 7" iPad

Everyone is predicting that Apple will release a 7" iPad; I believe this would be a BIG mistake. The iPad is doing so great, why mess with a good thing.  Don't get me wrong, a 7" device would do well.  It just shouldn't be called an iPad.  I believe the best thing for the market would be a larger iPod Touch.

I believe a bigger iPod touch would re-ignite the iPod product line, give the users what they want and solidify Apple position as the dominate tablet maker. Sure it might cannibalize iPhone & iPad sales slightly, but it will reduce the number of 7" tablet lovers that choose an alternative brand.

Many will argue that Apple has extensively tested all the possible tablet sizes and settled on the 3.5 and the 9.7 inch as optimal sizes as far back as 2005 or 2006. Others will rant about Steve Jobs' dismissal of (or attack on) the 7 inch form factor; that He (or Apple) does not believe that it is an appropriate size for a tablet - it’s a tweener neither small enough to carry around or big enough to use for work and documents.

There in enough interest and demand for a 7" device, so it something Apple is definitely considering.  They would be crazy not to do so.  Likewise, they would be crazy to monkey around with the iPad brand.  The iPod Touch currently starts at $199 for a 8GB model; reaching $399 for thee 64GB model.  Apple could easily price the 16GB New 7" iPod Touch at $199 and simply steal the show from Amazon and Google. Apple could afford to offer the $199 device with 32GB and still do well.  Apple could even sell a unit for $299 with added 3G or 4G antenna in addition to the WiFi capability. Will a 7" iPod Touch device squash the competition completely? No, there are enough people who would never buy Apple or better yet simply will only buy Android.  But Apple would gain enough of this market to make it an non-issue.

The iPod Touch would continues to be a gateway to all things Apple; leading to eventual sales of iPhones, iPads and Mac computers. It would be comparably inexpensive and even offer features like Siri to help seal the deal.

Would Apple be foolish to call the 7" device an iPad?  Is the 7" iPod Touch a better product for Apple to release?  What do you think?