People are looking at iPod touch and iPhone and thinking that the sales of those would translate to an iConsole sales. How many iPhone / iPod users have apple computers? The vast majority of iphone/pod/touch users have not surrendered their lives to Apple. Without a competitive price it'll only be true believers who are gamers who will buy, and that probably isn't enough
If you want to get a feel for how the iConsole would sell then look at the desktop devices Apple makes, not the handhelds.
If anything it will be a multi-media device that plays games, a bit like how Sony tried to market the PS3 (and failed in that approach).
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