I thought your post was super interesting, but the last bit wasn't profitable

It was an odd quote, but I don't see how he came to the conclusion

If: the next Xbox/PS4 cannot comfortably run UE4 to Epic's satisfaction

Then: Apple "wins"

Presumably, Apple wins means that all the major developers will bypass publishing on the Xbox 3/PS4 and instead, what; divert all resources to iOS game development?

As long as it remains profitable to publish for Xbox and Playstation platforms, developers will take the resources allotted within the hardware and press on from there.

If the suggestion is that if the next gen of consoles isn't a mind blowing leap over the 7th, that consumers will bypass buying them and instead do all their gaming on iOS devices, then I think everyone can reach their own conclusion regarding the likelihood of that scenario.

Lastly, and I don't think this is what he was specifically referring to, but if the next generation of consoles don't use leading edge hardware and specs, they will age very rapidly relative to iOS devices like the iPad that receive annual spec updates.

In a world with annual updates for Android OS and iOS devices, the traditional 4-5 year hardware cycle itself seems dated.

That's exactly what I was thinking, and I totally see eye to eye with you on that.

Even with the annual release nature of iOS devices it will not over take consoles if they are slightly less powerful then Samaritan. To my knowledge iOS hasn't caught up with PS3 yet graphics wise or memory wise. A console 6x the power of 360 will remain far enough ahead graphically and quality wise for a full generation. An iOS device will not be able to compete with that.

Consumers who still enjoy games will be willing to keep supporting games. Early adopters will get an experience so far ahead of iOS that it looks like a NES. Then if iOS does catch up which is nearly impossible by the time it catches up consoles will be very affordable and be home to more high quality software.

Simply put iOS devices will not replace any of the big three. They have very little to worry about from Apple in the next generation.

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From a memory standpoint, the iPad 3 has the advantage but the amount of RAM doesn't really tell the whole story with non-upgradable memory devices as the OS footprint varies. Seeing as how no games have yet to be released that take advantage of the A5X chipset, there aren't any valid comparisons to be made. Infinity Blade 2 (playable on the previous A5) is on par with UE games on consoles, but that is one standout example in a sea of titles that may well have been developed for the Nintendo DS.

The thing to note is that the iPad gets annual updates, so the biggest hardware issue is less of an issue of how advanced the specs are, and more of an issue of which new games will be developed to also run on previous hardware versions with less processing power. If installed userbase is the key issue for the typical developer, there will be fewer games that actually take advantage of the newer specs. If it isn't, developers are faced with selling to a smaller userbase with no built in element beyond the minority user who is content to buy a new tablet every year. But since this whole OP addresses bleeding edge game development, assume such developers aren't concerned with making games that run on older hardware (even if older means a *whopping* 12-18 months old).

So in 2013, when the Xbox 3 and PS4 presumably release, the market will have an iPad 4 that will arugably be better hardware than 7th gen consoles with an iPad 5 with greater specs around the corner in March 2014. It will be a lot harder to engineer a reasonably priced console that can maintain a significant hardware lead for the next 4-5 years without stepping into PS3 $599 pricing. It's pretty clear from the alleged HD6670 in the Xbox 3 that MS isn't even bothering to play the "futureproof" game with their next console. Same for Nintendo with their HD4850 based console. It won't take more than 2-3 iPad iterations before the hardware allows developers to match or even exceed what's capable on the Xbox 3, PS4 (which remains the unknown factor spec wise) and Wii U. At that point, the only advantage consoles have is the merit of being cheaper which won't matter if iPads are still outselling consoles or are at least selling well enough to steal major developer dollars away. 

But the only way I can see a significant push being made for iOS game development as a leading edge platform would be an official Apple Bluetooth game pad controller and the ability to wirelessly transmit the video signal to the iTV. Naturally, the problem with such a system (which would essentially be an Apple brand controller and a $99 iTV box in addition to an iPad) is that games still have to be developed to function without the gamepad/HDTV combo, which is severely limiting from a UI perspective. That is unless Apple brands gamepad/iTV games as being something separate from the standard tablet/touch/swipe games all iPad users have become accustomed to. Whether that would even be worth Apple's trouble for a potentially less than successful endeavor is up in the air. It depends on if they're really pushing for control of the living room entertainment market or not. 

Since the yearly iPad HW updates are most likely to attract 3rd parties, the manufacturers in most trouble are those who heavily depend on ordinary 3rd party offerings. And we know who that is. Sorry boys.

Battery life is an issue. The new iPad will have similar battery life to a PS Vita when playing graphically intensive games.
With a new iPad release each year, battery life can only go down. The iPad3 is already getting fatter instead of thinner. This is because this was necessary to maintain similar battery life to the iPad 2 despite the big increase in power.

The extra battery is more for the screen and 4G, and to a lesser extent the extra RAM.

Read the reviews on the new iPad before finishing that thought and then wait for the lab battery performance tests. The battery life is unprecedented. Apple had to increase the thickness of the back case by about .6mm to accomodate the new cell, but it is no exaggeration to say that it has the best battery life of any comparable device.

By all indications, Apple will continue to maintain a target 10 hour battery life regardless of what spec updates future iPads have.

Comparing the iPad to the PSV is a bad match up. After a good two plus weeks of using the PSV for everything from downloading files via WiFi, web browsing, light gaming, watching video, the works; there is no comparison. There's no reason to believe that if the battery tests were limited to playing graphically intensive games only that the results would be any different unless you're suggesting that the PSV magically manages battery life better than other devices when running at 100%.