I've bought most things Apple has put out and was thinking about this for my wife. $329 16GB Wi-Fi only? Forget it. Apple could have crushed... CRUSHED...the competition with a product in the $275 range. Just don't get the logic.
Why does everyone think that Apple wants to crush the competition. Google and Amazon's business model is to sell their hardware for zero profit. Not sure if Apple wants to compete at that level. I am sure they are happy to leave the lower price range for Google and Amazon and just carve out their mid tier range. There is room in this space for multiple products at different price points. BMW could also crush Toyota if they reduced their prices, but it would be a no win for both companies.