That's exactly what Apple will do next year. Sell "last years iPad". That's what they did with the iPad to iPad 2 transition, and now with the iPad 2 & 3.
No. The iPad 2 replaced the iPad (original version). There was no $399 version prior to the iPad 2012 showing up.
"... Horwitz offers a $399 base price for the iPad 2 as a possibility, although that number appears to be pure speculation. ... "
https://forums.macrumors.com/threads/1303980/
" ... Apple has announced it will sell the iPad 2 alongside the new iPad, with last year's model tumbling to a more palatable price of $399 for the WiFi-only model, .... That entry-level price in particular puts it in more direct competition with a slew of mid-range tabs that previously undercut the iPad, including the Samsung Galaxy Tab 7.0 Plus and others. ..."
http://www.engadget.com/2012/03/07/apple-drops-ipad-2-price-to-399/
You are rewritinig the iPhone history for the iPad history. It isn't the same. Apple never introduced a 'smaller' iPhone at a lower price point.
It's what they've done with the iPhone line since the iPhone 3G/3GS. I'm not sure I follow your disbelief they will continue to do so.
There is a distinction between iPhone and iPad. The major difference is that there is no phone device below the iPhone. For the iPad the iPad mini will sit between the iPod touch and the iPad. The Touch at $299 $399 and the iPad at $499-$899 there is only a small gap to sell the mini into. Cluttering that price range with "last year's product" is not what Apple does across their product line. They don't sell last years Macs. Where they do there is either a gap or a large subsidized pricing difference ( and folks buying the phones on 2 yr contracts. If broken over those two years will need replacements of same model. ).
The 3GS is around because iPhones are extremely expensive phones. The only way to get traction in non-subsidized markets is to have a more affordable phone around. There are two ways to an affordable phone. One is to purposely build one. Second is to sell old tech. Outside of the phone subsidy market it is different context in the latter case.
For example, "last year's iPod touch " sells below the current Touch prices but above the iPod mini prices. It is old but it is above-below the other flash based iPod offerings. Next year when the screen techology has higher margins those "old tech" iPod Touch will probably disappear. (the $399 Touch is huge stretch on pricing. They'll get away with that this year but next .... not so sure.)
If Apple manages to get the entry iPad mini to start at $299 then a pricing sequence of 299, 399, 499 would be the price points on the 3 memory steps (e.g., 8/16/32 or 16/32/64). Throw in the $130 radio variances for cellular and there is tons of overlap with the iPad 2.
Apple knows that there is a huge group of people out there that are price sensitive and are OK with last year's technology. Even with the iPad mini as a low cost option, many will still want the larger 10" screen.
You pay less and you get less. Outside of contract pricing devices Apple has never been a big fan of selling last years tech at reduced prices. People may want a 10" screen, but outside of refurb and used that isn't necesssarily Apple is fond of doing (since the disastrous 90's ) . That's artificial cannibalism. That iPad 2 and iPad mini engaging in unnecessary fratricide doesn't do much for Apple.
Ultimately Apple can't get the iPad mini in the $300 price range without making some sacrifices in specs. Shrinking the screen, case and battery alone won't get them there cost-wise.
Apple doesn't have to make any quality scrafices. You need less battery because don't have to light up as much screen (nor power as heavy a GPU). Smaller screens generally cost less ( unless invert ppi density or something like that). Less aluminum in case .... costs less.
The optimist in me says they will go "Retina" seeing as how the "budget" tablets have impressive ppi numbers. If they don't match that they will have a hard time differentiating the mini and justifying the premium.
They'll have a relatively easy time pointing to the different since app ecosystem. Optimized iPad apps will run unchanged on the iPad mini. They'll just appear a bit smaller on the screen.
The iPad mini is largely going to compete with the iPod Touch (mini is bigger and has optional celluar connectivity ) and iPad ( it is smaller and lighter to hold in one hand. ).
I agree that Apple isn't trying to race to the bottom to compete with the 7" $199 tablets, but they are most certainly trying to go after many of the same consumers that are currently buying those tablets.
No they aren't. Those consumers don't want to pay. $300+ for devices. Apple really isn't going to have anything significant for them. (even $299 + tax is going to be over $300).
