But I don’t think removing the screen was primarily to preserve the high-end iPod sales. I think Apple decided it needed to hit $99 with acceptable margins and enough storage to make it a useful product. Adding a screen means a bigger battery and extra buttons, which makes for a larger and more expensive product. Apple is betting that customers would rather have 512 MB of space than a screen and FM radio, and I think they are making the right bet.

I also agree with the ecosystem comment. You see a lot of iPod specific 3rd party products, but rarely any for other brands. This is probably because there are too many other brands with small individual market shares to do anything other than generic accessories.

This point can’t be overemphasized, because it’s why retailer that wouldn’t touch a Mac with a 10-ft pole will carry iPod and related accessories. (Look up the comments made by the Sharper Edge CEO about this.) Also, it means Apple has a bunch of small companies that depend on the success of the iPod, and those companies will spend marketing money to help promote the iPod.

Where I disagree is that Apple has an equivalent ecosystem for the Mac. In fact, the opposite is true; the Mac doesn’t have much of an ecosystem compared to Windows and it suffers because of it.

I wouldn’t worry about the Mac mini cannibalizing Mac sales. There are a lot of people that won’t want to put together their own system or that want a laptop or a machine with a larger internal drive. Also, Apple is well beyond the days of selling stuff at a loss and making it up on volume. While Apple doesn’t make as much money on a mini as on a more expensive computer, I’ll bet that percentage-wise it’s still good, and better than what (say) Dell gets for its stuff.