If we do get an iPad mini from Apple later this month, how much should it cost?
It’s an important question. As things stand now, the new iPad starts at $499. You can also get the iPad 2 (with a slower processor, lower brightness, lower color accuracy and without the Retina display) for $399.
The two iPads currently on sale, of course, have 10-inch screens. (I’m rounding up; it’s more like 9.7 inches.) The most credible estimates of an iPad mini’s screen size put it at just under 8 inches.
The competition has embraced $199 as the basic price for a mini tablet. That’s where Google has the Nexus 7, Amazon has the Kindle Fire HD, and Barnes & Noble has the Nook HD. And you know what?
There's no way Apple should sell an iPad mini for anything near that little.
Here's why: Apple already sells the basic iPod touch at $199 with a much smaller screen, more than 3.5 million of them last quarter alone. And last month Apple announced plans to sell the new 5th generation iPod touch (with the bigger screen, 32 or 64 gigabytes of storage, and a Retina display) for $299 and $399.
So if Apple wants to sell a mini iPad, there are a couple options.
One, sell a 16GB version for $299. Sure, it's an odd price in that it overlaps with the high-end iPod. But with a lower resolution screen and less storage, a mini iPad would have a very different value proposition. You're not going to bring a mini iPad to the gym to listen to music, or on a hike to take pictures.
Another option would be to price it at $349 or even $399. Under that scenario, Apple might have to stop making the iPad 2 widely available to avoid a pricing muddle. (I doubt Apple would stop selling the iPad 2 completely under any circumstances, because the older-generation product has good margins and sells well into the education market.)
But the main thing I'd want to put to rest is the idea that Apple has to come anywhere near a $199 price point on a mini iPad to potentially outsell the competition. It's more important that the pricing makes sense within its own product lineup, which consumers are already embracing.