Is Apple’s upcoming iPad mini aimed at consumers looking for an inexpensive tablet or folks seeking an Apple tablet that can be popped into a jacket pocket?

That’s the real question facing observers as the Cupertino, California company prepares to introduce its 7.8-inch product tomorrow. The answer, of course, will tell us just who Apple thinks its rivals are in this space…

“The key question is whether Apple decides to price in-line with its margin model or does it get aggressive to go for the kill against competitors”, analyst Shaw Wu of Sterne Agee tells the Wall Street Journal’s AllThingsD blog.

Wu also wrote in another note that he expects Apple to partially absorb manufacturing costs stemming from stricter quality control for the iPhone 5, amid numerous reports painting the handset as being prone to scratches and nicks far more than normally expected.

Wall Street seems to agree that the new device will be sold between $299 to $399, which tells us Apple probably doesn’t want to reduce its sumptuous margins in order to go toe-to-toe with Amazon’s Kindle Fire HD or Google’s $199 Nexus 7.

Google, meanwhile, is expected to take on Apple on the high-end with a ten-inch Nexus tablet, reportedly due for an announcement at Google’s October 29 media event.

Obviously, Apple is not going after the consumers searching for an inexpensive tablet.

This is not where you can pull in 30 percent margins. Indeed, Amazon CEO Jeff Bezos recently said the Internet retailer sells the Kindle Fire at cost with the belief that sales of electronic books and digital music will make up for the loss.

Such a suggestion would give Apple’s leaders a cardiac.

Apple has been very successful at operating in the premium marketplace, squeezing efficiency out of its suppliers to fuel high product profit margins which investors love. The iPad mini will be sold not by being the least expensive, but by being the most convenient.

In Apple’s marketplace, convenience trumps price. Only when the company notices flagging sales or desires to refocus consumers will prices fall.

What do you think?

Can Apple effectively compete in this space by offering the most expensive seven-inch tablet?

  • I think it’s too expensive

  • I’ve read a few of these reports on the price. $300, $349 is way too expensive to compete in IMO. The nexus is a great tablet for the price. $249 I can understand but I think if there goal is too steal away customers in this market, price point is a strong deciding factor and if I was to choose, I’d go Nexus and save my money. Unless it it’s features are just that much more compelling.

  • I’ve lost excitement hearing the price.

  • The title of the article made me laugh. Sounds dirty!

  • I think anything from 300 to 400 is a sure way for a disaster. The price gap between the mini and the regular iPad will be too small to justify going for the mini (people are not keen to “pay” just “to get a smaller one”). Especially given that apart from the app situation the Nexus 7 and Fire are actually GREAT (and I do say that as a “nothing but apple gear” guy) for so much less cash.

    On the one hand I think Apple can’t be that ignorant, but on the other hand… I think Apple can. If they have to sell it at that cost just in order to make it worthwile building an iPad mini at all, they shouldn’t have done it in the first place. The difference in price kept Apple from success over decades, it will be a shame if it goes back there.

  • iBanks

    I believe at a minimum of $200 less than the iPad 2, it will sell fairly easy. At $100 more than the competition, I think it will still outsell what’s available. The iPad still outsells all other tablets at it’s going rates now, there is no need for Apple to become competitive in price by matching the prices that are out. Most are willing to pay more for better products in which has been proven over the years in any industry.

  • UMmmm duh apple is elite they alway over price this stuff be at least 25%

  • Of cause it will cost a lot …It’s Apple.. They didn’t get all that cash for selling items on the cheap..

  • it’s a business…the point in business is to make profit, the bigger the profit the better. there is no other point in business but to make profit.

    Apple isn’t bargain basement and they never will be. they produce quality and doing so does cost money. you can’t just factor in cost of parts but also the R&D, marketing, advertising, salaries of those involved, packaging, distribution (this itself has many factors that cost a fortune), and the list goes on. there are a lot of things that the cost of a product has to cover.

    all of this pricing on the “mini” is just speculation at this point so why are people getting their diggers in a knot? it could very well come out at a competitive price and it could very well come out being expensive. Apple has always been expensive so i’m not sure why anyone would be surprised by it now. in the end the “mini” will sell a shitload and so will the iPad. i recall all the negativity when the first iPad was announced…all of the people claiming it was overpriced and that it was going to be a failure…that no one would buy one. here we are just over 2 1/2 years later and they’ve sold MILLIONS of them and they still dominate the tablet market. there are those of us who want both a regular iPad and a “mini”. they both serve different purposes and conveniences. the “mini” is going to be so much lighter and so much easier to hold for long periods of time. it will also be more portable and easier to bring with you. the size is what i love about my sgt2 7″. i would like it more if it had iOS instead of Android and even more if it were aluminum instead of plastic. the tab cost $249…i would gladly pay another $50-$100 for the same thing from Apple.

  • I think that be will be buying these things like crazy, regardless of the price.

  • If apple do make it cheap compared to other products then the iOS to android market share could flip very quickly.

  • JonDuke

    I’m sorry but Apple post-Steve Jobs is becoming greedy and arrogant.

    They’ll sell their ipad mini at a ridiculous price and assume people will buy (and they will).

    They are selling the iphone at a higher price.

    On top of that, they’ll refresh the “new” ipad after 6 months? Really? People who pay big bucks for Apple products want the latest and best. Updating that quickly is arrogant and again, assume people will update.

    Personally, I’m waiting to test the Surface and the Nexus 10 and selling my new iPad.

    I’m dumping Apple. I love the products, but being arrogant with your client like that is unacceptable. I won’t support greedy people.