The rumors were true: $329 for the entry-level iPad mini. In the months leading up to the reveal, guesses for the price ranged from $199 to $299. Why did Apple choose not to simply shave $30 off the price and make it a "cleaner" price? Seems like a relatively minor margin blow with a huge upside, no?

My quick answer: because they can. Or at least they *think* they can.

I think they can, too. People will pay the price they're asking. Usually I hate anecdotal evidence, but based on reactions from family/in-laws/family friends this is a sweet spot for the 50+ demo with disposable income who wish the Playbook was better than it was and want something similar size-wise but were watching and waiting to see what Apple would do here.

Apple doesn't worry too much about what the competition is doing. I think this price is a reflection of that. Both Amazon and Google are making no money on theirs and they don't have amazing cameras (5MP back shooter for instance).

Apple probably could have charged $299 but they roll with healthy margins.

I was a bit nervous about the $329, worked out though. The features match and exceed the $299 iPod touch, pricing it below wouldn't make much sense to the consumer.

It's about who they will be competing with. They feel that they have a large enough arena of customers who want a tablet but didn't want to spend $500. Those could be iPhone owners who wanted a companion device for cheaper, or those who haven't yet bought a tablet. The bet is that those markets will offset any cannibalization.

They're charging $329 because they feel they will sell as many or more as if they had charged $249, that bit is simple.

I originally heard $200 - $240 for an 8GB SKU. That SKU was dumped. I think "they can" is absolutely right. It seems like the original thinking was Kindle Fire and Nexus 7 would do better than they did, and that price pressure never materialized.

The Nexus 7 comparison to me seemed like Apple explaining why they deserved $80 more for the iPad mini: Bigger screen, better apps. It was an odd segment, and arguably they didn't need to make that case, but they chose to.

What was also interesting was the lack of a big iBooks push.

I thought the same thing, Rene re: the Nexus 7 comparison. "Here's why we can charge so much more than this thing" felt like a part of why they dove into all of that.

49% more content when web browsing thanks to no on-screen controls, Schiller said. Price diff between 199 nexus and iPad mini at 329? 49%

Heh. Nice, Darrell.

Related: I thought that was *very* smart of Apple to highlight. 7" vs. 7.8" will sound like nothing to an average consumer, so they put it in terms everyone can understand. I also like the subtle notion that Chrome the browser has too much, well, chrome.

The other part of that is aspect ratio. 4:3 > 16:9/10/whatever when in a similar package. Worked out nicely for them there.

To get back to the original question though, I'm not super bullish on this price. Look, I get why it's priced how it is. And I think they'll sell a lot of iPad minis.

But I think if Apple wanted to really blow the doors wide open and make it almost impossible for the Nexus 7 or Fire HD to be viable alternatives for less informed / mainstream consumers, they needed to get below $30 (even if all we're talking about is $299).

As it is right now in the 10-inch space, Apple carries the benchmark -- sometimes even the cheaper -- price. That makes the full-size iPad a total no-brainer compared to most of its competition.

Unrelated: I can already hear a huge new wave of ignorant asshats carrying on claiming Apple kit is overpriced compared to other devices. Granted, those competing tablets may be sold at break-even or even a loss, but who's counting?

I agree completely with Ryan. At $250 the iPad mini would have all but killed the small tablet market. At $329 there's a $200-$300 umbrella underneath it where other at-cost or content-subsidized tablets and appliances can breath and get a foot in the door.

There's that old quote about market share vs. profit share, and granted an 8GB iPad mini would have sucked, but it would have shut that door. Hard.

(And gotten a lot of people into stores who may have then gone 16GB for $350 anyway.)

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That's right. Google and Amazon are selling their tablets at a loss or break-even. That's great, but that's not Apple. Apple makes money selling the hardware. Because they have more hardware prowess than either of the others, maybe they could dip into the $250-$300 range and eek out a decent profit. Who knows, maybe even $200 would be profitable for them. But this thing *seems* of higher quality than the others.

Further, neither Amazon nor Google have proven their models will even work yet with regard to tablets. Amazon is probably making a little money on the Fire with content, Google probably even less with searches and less content.

I totally agree with Ryan and Rene here. Curious that all Summer you had Wall Street analysts saying that Apple was planning a less expensive version of the iPad to squash cheaper rival devices. They said it was all in an effort to prevent them from dominating that lower segment. But in the end they're not really competing with those devices anyway. Am I wrong?

To me it seems like they're only competing with themselves. And Apple's happy to do that. To MG's point, I rarely if ever have viewers ask me about the Nexus 7 or the Kindle Fire. Amazon can't compete with 90 countries of market penetration for the iPad.

Seems like one of two things will happen: this will turn out to be a tempest in a teakettle and most mainstream tablet consumers will go straight to the iPad mini, ignoring (or not even becoming aware of) the Nexus 7 and Fire HD.

Or, mainstream consumers are / will become aware of the price gulf between the iPad mini and its competition, and the $200-250 range of small tablets will now eat into the mini's sales.

Either way it's going to be kind of a challenge for us to tell because, as I said, Apple is going to sell a lot of iPad minis. I don't see a scenario where Tim Cook shows up hat in hand, apologizing for poor sales.

But there's just no way to know how many more Apple MIGHT be able to sell if they were more aggressive on pricing.