Did Apple get that extra .12 cubic inches out by leaving out the FM radio, FM Recording Voice recording, equalizer, and file navigation system that MobiBLU has? Yep, it's the worlds smallest stripped-feature digital music player. ;-)
Yes. They also left out the video camera, the GPS system, the PDA functions, a keyboard, mouse, and the kitchen sink.
Leroy, if people want those features, they can buy your MobiBLU... most people do not.
Into what pocket do you comfortably carry a ~1" cube?