Finally, in addressing pricing on the rumored iPad mini Gruber suggests that Apple could approach the $199 pricing seen on the Kindle Fire and Nexus 7 by leveraging its massive supply chain and economies of scale to bring its own costs down to the neighborhood of $150 and still maintain profitability. But even pricing of $249 could be competitive depending on hardware features and factoring in the benefits of Apple's extensive iOS/iTunes/App Store ecosystem for customers.
Sometimes Gruber drinks so much Cupertino Kool-aid that he goes irrational. This is one of those.
Apple will have some scale discounts but they aren't building the same device. If all were building 7" tablets that might be a differentiator, but they aren't.
After building this argument that the iPad mini is much bigger (i.e., bigger screen , bigger case ) than the 7" tablets he then invents a hole in which Apple can buy much bigger components at cheaper prices. That's right the bigger LCD panel (40% bigger), bigger glass (more Gorilla glass) , coupled to the likely bigger battery ( to power such screen ) Sure the resolution is lower, 163 mini ppi vs. 216 ppi of the Nexus 7, but that would only compensate for making them more even. Not a 22% reduction in cost due to scale. I doubt Apple scale gets them 22-25% discounts lower than what Amazon/Google's builders are getting on contract. It is likely smaller than that.
It seems far more likely that Apple will charge a price like $299 (keeps with their standard _99 pricing for all iPads without cellular radios. ) and justify being higher priced than the 7" tablets for exactly the reasons outlined. "It is really an much bigger 8" tablet" so you should pay more. Bigger screen... pay more.. MBA 13 costs more than MBA 11. MBP 15 costs more than MBP 13". iPad costs more than iPod Touch. It isn't like they haven't structured this argument in part before.
If the component costs for the iPad mini are $210 then a $299 price point would give Apple 30% margins. Very much in line with what they get now. The $100 increments for 8 or 16GB Flash increase in the "better" iPad mini will only fatten they cash horde even more with even larger margins. Similarly if there are Cellular radio options versions. There is so much markup in those "add ons" that even $230 in component costs on the entry model (23%) would fatten Apple's coffers.
Remember also that Apple most likely will include more components than the Nexus 7 or Fire. Two cameras ( iPod Touch , iPhone, and iPad have two cameras )... .the mini is going to have none or just an extremely weak VGA front facing one? Probably not. Probably a better speaker than those two. Probably Bluetooth 4 ( Nexus 7 has but fire doesn't). Apple is likely going to machine tool the case out of aluminum... don't think Fire/Nexus are spending as much on case components.
My guess is that the iPad2 would either disappear when the mini appears or will disappear when iPad 2013 appears. In the latter, case there would be a period where iPad 2 and mini's overlapped in price. In short, selling "last year's iPad" was just a stop-gap measure until they get the "mini" version online to hit the lower price point with a device with lower costs because it is smaller, not because it is older.
iPad mini $299 $399 $499
iPad 2013 $499 $599 ......
fits Apple's historic pricing patterns.
A $299 price point would still be pretty aggressive. The Samsung Galaxy Tab 2 7.0 is $249 at amazon
http://www.amazon.com/Samsung-Galaxy-Tab-7-Inch-Wi-Fi/dp/B007P4VOWC
They can use the "bigger" argument for the extra $50 in cost.
P.S. The $299 helps them save iPod Touch pricing too.
If they went to just two Touch price points.
$199 (16GB) $299 (32GB)
then the 32GB iPod Touch could more easily overlap with the $299 (16GB) iPad mini. The difference is storage; which Apple uses in iPad differentiation now. ($399 touch and $399 iPad 2)
Right now the $199 8GB Touch is crippled too much. Same price can get a Nexus 7. At least with 16GB it has a storage advantage to offset the screen size deficit.
