I agree regarding the retina for iPad Mini 2.
1) They don't want to cannibalize sales from the iPad 5.
If they can avoid doing that, they would like to, but I think they've realized that it's better to cannibalize your own sales than to have someone else do it.
2) How do they retina-ize the iPad Mini/iPad 2? It's gonna be the same resolution as the iPad 4/5? Maybe it could be a shrunk iPad 4. But how do they differentiate the iPad 5 from the Mini 2? Fingerprint scanner? Better camera (less important than on an iPhone)?
One is a 10" tablet, the other is an 8" tablet. That's really all the differentiation that they need. I would imagine that the iPad (10") will have nicer hardware (better SoC, better camera, etc.) than the mini, but size is enough of a differentiating factor.
3) They can't do something in between doubling the resolution and staying at 1024x768 either. Maybe 1600x1200 would be nice.
They'll do it the same way that they did retina every other time: double the resolution and quadruple the pixel count. A retina iPad mini would have the same resolution as the iPhone, so it's not exactly difficult for them to procure screens.
4) Since everyone thinks Apple is stagnating, I highly doubt they would go for something that knocks it out of the park compared to the Nexus 7. I could be wrong though. Apple was awfully aggressive with its iPad 1 and 2 in terms of pricing despite having almost no competition. It's quite interesting how Apple was rather innovative in its early iPhone days even though Android posed little threat.
In the tablet space, they still don't have a lot of competition. Android on tablets is still not as good as it is on phones, and even though the OS itself is worlds better than it was two years ago, the apps are still seriously lacking and you still run into several that are just up-scaled versions of something designed for a phone.
Personally, I'd like to see them make something like Microsoft's Touch Cover, but I doubt that they will. The only other thing that they could really do to wow me would be to have some kind of hybrid display that has both an e-ink and LCD mode. Otherwise the best thing that they can do is improve their cloud offerings, which is one important area where they're clearly lagging behind.
Beyond that, there isn't much that they can add that most people would get excited about. It's just going to be smaller, lighter, more efficient, and slightly better in other ways from here on out.
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