I have fond memories of my sexy 12" Powerbook.
The 12" Air will most likely replace both the 11" and 13" Air.
It will certainly simplify Apple's 2014 product line up:
12" Macbook Air
15" Macbook Air ?
12" Macbook Pro
15" Macbook Pro
I don't think it will be a budget iMac.
Instead Apple will go for a mac mini redesign.
Think same form factor as the mac pro but in Silver.
This way they could go from real basic to higher end. E.g. The new cylindrical mac mini could have the same specs as the high end 27" iMac but with the same price as the entry level 21" iMac. Now, that would be tempting …
I believe Apple will go the opposite way. Smaller instead of bigger:
iPhone = 4" screen
iPhone mini = 3,5" screen
iPhone nano? / iWatch? = ?" screen
Before I go: To all those phablet people out there. Why would you need a bigger screen to make a phone call? Would you be happy using an iWatch in combo with your iPad mini?
What about combining the fingerprint sensor with the facetime camera? The facetime camera can make use of the face recognition software from iPhoto?
The next iPhone should be called MI6 ;) Just joking, here's hoping for "iPhone" and "iPhone mini".