I think you've missed some of the rumors. Rumor has it that the new 7" thingie isn't retina. It's going to be have a 1024x768 display (i.e., iPad 2's display re

I think you've missed some of the rumors. Rumor has it that the new 7" thingie isn't retina. It's going to be have a 1024x768 display (i.e., iPad 2's display resolution) but with more density. If you do the math, it turns out that it will be 163 PPI, the same as original iPhone, iPhone 3G and iPhone 3G S. So Apple can use the same machines that it's been using for years to produce iPhone (non-retina) displays and just cut them a little bigger. So, according to rumors, there won't be fragmentation. How well that would work in practice? I'm personally pessimistic.