Interesting, but the required price point would cannibalize the larger ipad and that would be the last thing that apple wants to do.
Maybe, but look at the other lines. The Shuffle took away from the Mini. The MacBook Air competed with the MacBook and MacBook Pro. Anytime you put another product out there, you are going to siphon away a certain part of your customer base.
But there are a couple of facts that temper your thesis.
First, I'm not sure I would consider iPads "durable goods". They don't have that long of useable life and if someone likes the product, they are going to buy an upgrade/replacement. And maybe one that better fits how they use it (smaller, more memory, 3G, etc.)
Once you get a customer, you'd better have future products that keep them a customer.
Second, a product at a lower price point will cause some customers to pull the trigger. Personally, I can't see getting an iPad for $500. $300? Now you have me thinking. $200? I'm there. Think of it like a Gatway Drug.
But once you get that iPad Mini customer, you have a better chance of boosting them to a more powerful, more expensive iPad in the future - if they enjoyed the iPad experience to start with.
Third, how the product is used is going to have a huge influence on the future purchases of a user. If the iPod Touch is too small and the iPad is too big, the customer will not go back to Apple products, despite the fact they can see the potential.
There is a need for a complete line of products, especially since the competitors are already in that gap.
Finally, we don't know everything about the iPad Mini. Think about this - the Click Wheel was introduced on the iPod Mini and came to the Classic six months later. The new iPad may have some innovation or development that will later come to the whole line. It might be a "proving ground" for future developments. That in its self might be enough to get folks to try it.
And
Breaking Good, interesting assessment of the pricing strategy, however, I disagree with the $50 difference between an iPad and iPad Mini. Apple has to price the product somewhere between what it is worth to the company and what it is worth to the customer. $450 just doesn't seem to leave a lot of value to the customer.
ejb