Well, hitachi have a one-inch harddrive and toshiba have a sub-inch harddrive, both at around the capacities you mentioned. But Apple would have to spend a bit of moola to get their hands on those. In which case, no way will the prices be around that.
Unless the minipod aint so mini.
<b><font color=red>"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety."</font color=red><font color=blue> - Benjamin Franklin</font color=blue></b>