I must stress though that is just an idea! Wishful thinking, if you want to call it. But it's certainly not a prediction. :D
Of course, Google or Samesung or whoever else could just swallow up this idea and make it their own, but Apple has the best eco-system and industrial design philosophy in place for this to work and to sell.
The idea is this: cheap 4-inch iDevices, for only $99 (or maybe $149 or $199) each. You can play or run all the games and apps from the App Store, and consume all the audio and video and books you want, and maybe even make phone calls and send/receive messages.
The catch? They're semi-dumb terminals. But they're aesthetically-pleasing, and ultra-thin and ultra-light semi-dumb terminals.
How will this work?
Firstly, the thing about this is that the aim is quantity. As in not just to sell to more people, but for people already with iPhones and what not to buy more than one of these. I personally could use a number of cheap ones, and I personally would like even just a 3.5-inch-sized one for $50. But maybe Apple wouldn't do that.
My personal use case is this: I want my weather app running and displaying for 24/7 and yet I don't want to use my phone for that -- I have other uses for it. And I don't want to buy a $300 iPod touch just for this -- too expensive! And the thing is, there's plenty of choices for weather apps. Can you imagine all those physical digital clocks (with weather features) on the market today? Apple could wipe them all away. I don't need Retina for this. Retina could only be an option. Or a later option. Or, they could just increase production of the same screens they have for the current iPod touch and iPhone.
Another use case is this. I want photos of my son being cycled through like a screen saver. A 3.5-inch screen would be fine, but this time, instead of a 3.5- or a 4-inch screen, there could be 6- and 8-inch options. (Or 6- and 7.85-inch.) Imagine Apple wiping away the "digital picture frame" market. Again, I don't need Retina for this, but Retina would be a very nice option. But, it's not just a digital picture frame. I can switch which app is displaying on this "iDisplay" -- weather, photos, videos, or maybe even Twitter, or a game.
Lastly, this fits in with the recent "second screen" or even multi-screen concept for when consuming content. You could have Twitter running on a 3.5-inch screen (or 5- or 6-inch if your eyes can't read on a smaller screen) while watching your favorite TV show on your 55-inch TV or your 13-inch Macbook Pro. Or you could have a book or encyclopedia or some other interactive content or social network on an 8- or 10-inch screen while watching videos or playing games on a bigger screen. And at the same time, you might still have your weather app displayed on your 3.5-inch, and your photos screensaver on your 6-inch iDisplay.
How can it make phone calls? More on that in a minute.
Technically, these iDisplays are not dumb terminals per se. If they were, they could be just simple wireless pocket TVs with built-in Airplay or Airplay-like mirroring technology. They could just be mirroring stuff from your current iDevice. But then, my point is lost: your iDevice might be unusable while mirroring. They should be able to run at least one app at a time, natively. So they have to be semi-dumb terminals. They might not need CPUs as powerful as in tablets and smartphones, but they would need decent GPUs. They would need a pretty good battery life and a pretty good wireless charging solution -- something that Apple has already filed a patent for (i.e. wireless charging from a few feet away). Obviously, they would at least need to have Wifi, and maybe Bluetooth.
But my main idea is this -- basically it can temporarily run one app on its own, and just pull the data as needed. So let's say, it will run the (updated) Photos app, and just pull the actual images from iCloud. Or you can configure one iDisplay to run a specific weather app, and of course, just pull the weather data from the internet. And so on.
How about games? It can run games, too, but this would probably need either better CPUs (and therefore might not become so cost effective anymore -- not from a profitability standpoint) or well, they already have the iPod touch for that. But I think it would at least need the accelerometers/gyro/etc sensors as well. Now here's the other thing. There's a new, Apple iHub, that is like Apple TV taken to the next level. It wireless charges the iDisplays, and even your iDevice. It basically runs a new iOS, but in multiple CPU cores such that each iDisplay would be using one or two or four of those cores. It could then support new multi-player iOS games that could be controlled using and viewed on the iDisplays, or controlled only using the iDisplays, and viewed on a larger screen -- maybe a 27-inch Cinema Display or a full-blown 40- or 55-inch or larger TV screen.
Boom. Apple takes over the living room with the iHub. Bye-bye, gaming console market (especially you, Nintendo -- which could find new life as a game developer just like Atari and Sega), and, oh -- the new TV idea! You have multiple screens at your disposal! All that iTunes media!
How about phone calls? Well, through the iHub, you can run Skype, or you might be able to tether your iPhone to one of your iDisplays. Or maybe the iHub itself has LTE (or even 5G) antennas such that each of your iDisplays are like phone extensions.
Could an iDisplay have a camera? That would be great, of course, so that this concept has other purposes, but this could be an expensive add-on. But then, the camera could have uses for gaming.
How about Siri? Of course! It just directs the queries through iHub. More Siri queries, the better Siri gets.
How will this not work?
Well, it's essentially shifting the focus again. First it was from the Mac as the main hub for iDevices, to iCloud as the main hub for iDevices and Macs. And now, it's shifting back again to one device (but still a non- or post-PC device, by Apple's definitions). Apple might think this is too cumbersome.
My guess is, a 3.5-inch (or a 4-inch) iDisplay could be at least $99. And $149, $199, and $249, for the 6-, 8-, and 10-inch ones. Maybe $50 add-on for iDisplays with dual cameras. Maybe $199? Or $299? Or $399? Or $499? for the iHub. But I think it has to be $199 or $249, if only they can have higher margins on the iDisplays. And to compete with the current generation of gaming consoles. But the iDisplays have to be able to work without the iHub. They should be able to connect to an iPhone, iPad, iPod touch, or maybe even a Mac. Or they could simply be standalone products that permit one and only one app. Or, the iHub could simply be the Mac -- but that makes things more complicated. The iHub becomes a hub for these iDisplays, and the iHub is an iDevice itself that is synced up with your other devices through iCloud.
Oh yeah, and my other idea, from two posts ago, is a $299 (unsubsidized) iPhone nano, which essentially works like an iDisplay, but with actual phone capabilities.
UPDATE: I just realized that Apple already sells this "cheap" iDevice in the form of a refurbished 4th gen iPod touch 8Gb for only $129. It is refurbished though. Now, all that's left is that iHub thing. Plus, the problem is the 4th gen iPod couldn't do Airplay or Siri. But then, it could be like a bluetooth controller or remote for that iHub. And obviously, the iHub could well just be a super-souped-up 4th gen Apple TV that is expected to be released this year.