The benefit is mostly to reach a bigger market without cannibalizing the existing market too much. It would be awkward to sell a cheap 10" tablet that is really 'good enough' to most people along side an expensive 10" tablet. How do you explain the differences and justify paying 30-50% more? The only reason they can get away with selling the same sizes of iPhones is due to carrier subsidies. They can make money on the low end devices. If a consumer was walking into a store to buy a 3GS off contract they would likely not pay more than $200 for it. Apple is getting more like $350-$400 from the carriers for a 3GS.