The two model strategy of the Xbox 360 (i.e. bare-bones, non-HD version vs. an expensive, feature-heavy version), has been an unpopular feature of the console development but it looks like Microsoft will be using the strategy again with the successor to the 360.
Here's what a story at gameindustry.biz had to say:
"It's…believed that Microsoft will continue its successful two SKU strategy", the story claimed, "and indeed take it much further with its new platform: a pared down machine is to be released as cheaply as possible, and positioned more along the lines of a set-top box (the use of 360 as a Netflix viewing platform in the US is colossal) and perhaps as a Kinect-themed gaming portal, while a more fully-featured machine with optical drive, hard disk and backward compatibility aimed at the hardcore would be released at a higher price-point."
There are a lot conflicting rumours about when the Xbox console will be revealed, so who knows when we will learn solid details about which strategy Microsoft will use.
[Source: via Kotaku]