I look at the iPad Mini as Apple's attempt to create a midrange market sector, not compete with budget market tablets. I think they were trying to expand the market just like they did when they put out the cheaper but still midrange priced iPod Mini. It cannibalized the original iPod a little, but people bought both and it grew the market. Later, they put out the Shuffle and actually went after the budget market.
I don't entirely think the two situations are as comparable as some people tend to believe. The iPod had a luxury, the iTunes store, that competitors simply couldn't rival, and in terms of sheer music selection, many companies (Google & Amazon, mostly) still can't compete. For many people, the only logical choice was the iPod, and a smaller and cheaper iPod made all the sense in the world because of the fitness market that no company was catering to. There
With the iPad Mini, Apple wants it both ways: it wants the budget consumer while maintaining a premium presence. It's a difficult balancing act, no doubt, and while I ultimately think the product itself will be a success, it may come at the price of the higher margin product in the long run.
I think the iPad Mini was meant to eat into the group of consumers that give the Kindle HD-style products serious looks, but too many regular iPad buyers will look one level below at the Mini. The Mini may actually become the standard in the product line; the Mini will be the Macbook, while the regular iPad will be the iMac, for sales comparisons sake.
But I don't own a Deloreon, so we'll see.
I think it's a mistake because you generally don't want to commoditize your own hardware. At the same time there's a budget market out there that's currently being dominated by Android. Google doesn't make any money off that market because it's full of users who don't have internet access so they probably don't care if they lose it. Apple might be able to kick out Google from the low end sector without damaging its brand too much. But who knows
While Google and Apple are duking it out on software, they're too different to compare, and their revenue streams come from vastly different sources. Google doesn't care if the user is poor or in the top 1%, as long as they have a Gmail account.
