Rumors about Apple gearing up to launch a mini iPad simply refuse to die and it seems that the demand is quite plausible, since the success of 7 inch tablets have made it clear that there is considerable scope of expansion in this domain.
Various tech analysts have made it clear that Apple needs to launch a 7 inch version of its iPad, without which there is a danger of losing considerable amount of market share. Patrick Moorhead is one such analyst who happens to be the president and principal analyst of Moor Insights & Strategy. According to Moor head, Google Nexus tablet would be a success which can harm the market share of Apple unless it acts before it is too late.
Apple has made a good move in reducing the price of the iPad 2 but still, the price of $399 is not very effective in competing with $199 devices like Amazon Kindle Fire and Google Nexus. Price would be the most important factor when it comes to a mini version of iPad, since Apple might find it real hard to reduce the price of the device to the level of Google and Amazon. After various estimates, the overall materials and manufacturing cost of the mini iPad can be about $185, which does not include the marketing cost and the cost associated with R&D.
At a manufacturing cost of $185, it would be real hard for Apple to launch the device at a price comparable to the price of Kindle Fire and Google Nexus. However, studying the cost analysis of the Apple products does reveal that iPad mini would have the smallest gap between the bill of materials plus manufacturing costs of any iPad. This means that if Apple finally launches the 7 inch version of its iPad, it could end up cannibalizing the sale of iPad with a better profit margin. This strategy would be against the trademark behavior of Apple and is highly unlikely to happen.
If Apple really decides to sell the mini iPad with a price tag of $299, this would give Google and Amazon a clear edge with a price of $199. A difference of $100 is certainly huge and in the domain of 7 inch tablets, where Apple’s monopoly is non-existent, it would be a hard time for Apple. Theoretically speaking, it would be great to have a smaller version of iPad, but practically, it seems a bit of a problem for Apple to make that possible.