Refreshed internals, lower price point possible.
iPad, iPad Mini, and iPhone 5 Cases Compared to an iPhone 4S
The photo does a great job showing the relative sizes of the various devices. The largest case in the back shows the size of the current 3rd Generation iPad. That iPad houses a 9.7" diagonal display. The next smaller size case is for the rumored "iPad mini". The smaller iPad is believed to have a 7.85" screen with a smaller surrounding bezel while retaining the same aspect ratio and resolution (1024x768) of the iPad 2. Rou notes that the iPad mini headphone jack is positioned at the top of the case.
Finally, there is the rumored iPhone 5 case. The iPhone 5 is believed to have 4" diagonal screen. The iPhone 5 is expected to be taller but not wider than the current iPhone 4S which is also pictured above.
Apple is expected to launch the new iPhone on September 12th at a media event. The iPad mini is rumored to come at a later date, possibly in October.