I probably have alot more to learn in this life, but not from you on this subject. iSuppli used to regularly estimate products price costs within a $1 for products we used to make for HP, Dell & Apple, so I'm real familiar with the isuppli estimates vs real world cost deltas. Just FYI, if we were swapping out the Flash vs Apple, the delta is $4 at todays prices in 100K quantity, so I am guessing Apple as a much bigger parts buyer can beat that number.
Manufacturing amount is less then $10 for any of the iOS products, as was pointed out earlier, and there isnt alot of R&D for a product that is a shrunk copy of a currently delivered product. Apple makes a whole lot more then 2% of every single product they make, we are looking at 40% or so on the unit here if they make it 16 GB, are you really arguing that instead they should provide a sub-standard product at 8 GB. Also one last reason to not make a 8 GB iPad Mini. Its possible to up the memory on an iPad or an iPhone, it'll cost you over $100, but you can turn a 16 GB iPad to a 64 GB iPad. However it carries risks so few are going to do it so save $50 or so bucks after you pay shipping both ways etc. HOWEVER. If they come out with an 8 GB device, and charge $100 for each doubling so we now have $300 delta between the smallest and a 64 GB device, I expect a thriving memory update effort as those $250 8 GB units become 64 GB units all without another dime going to Apple.
And again I am pointing out to you that if Apple charges $100 for an extra 8 GB of storage, the press, the blogs and twitter will tear them up and down. There is plenty of money to be made selling a 16 GB iPad Mini at $250, and more profit at the bigger sizes, and lots of extra money to be made on the 32 GB and 64 GB models and even more on the cell models. Delivering a product that many will fill up and be angry about the size is not a clever plan and Tim is a clever guy.