Stephen Hackett, 512 Pixels:
The iPod touch is a big hit for parents looking for lost-cost devices for their kids, but with the original, A5-powered iPad mini now for sale at just $249, the iPod touch [at $199] is a harder sell. The iPad mini — with its bigger screen and better battery — is a lot better for games and videos, the two things kids do with these kinds of devices.
I think there's an additional factor - the iPhone. I see more and more parents breaking down and getting their kids iPhones at earlier and earlier ages. There's probably a few factors driving this trend, if it's in fact a trend. First, the luxury of having a smartphone continues to spread (now perhaps to younger ages). Second, it's darn convenient for the parents (to better keep in contact with kids, share iTunes purchases, etc). Third, there's a general shift from dumb phones to smartphones, so it's probably more common to buy your kid a smartphone as their first phone (heck, it's hard to find a dumb phone in a carrier store).