The iPad Mini at $329 is obviously priced a tad higher than many would have expected if the Apple Inc.(NASDAQ:AAPL) was really trying to compete with Google and Amazon.
At about 8 inches display screen, the iPad Mini is much larger than Google's Nexus 7 and Amazon's Kindle Fire tablets, both of which are priced at $199, almost on par with their cost price.
However analysts are divided whether the device would still pose competition to the cheaper prized rival products and whether Apple would be able to take away customers from them.
According to Chris Whitmore of Deutsche Bank, the iPad Mini has many other features that may outweigh the apparent disadvantage in its pricing.
For one, the iPad Mini has a larger storage capacity starting at 16 GB. This is against the storage of 8GB that the others are offering. That should give it a distinct edge.
The other big advantage of the iPad Mini is its build quality, which is clearly superior to the competition.
"Due to the high quality of the hardware, we expect the device will be very well received by consumers once they have an opportunity to test it," Whitmore wrote.
In other words, customers will be willing to pay a premium for the higher price, as they are getting a superior product with superior features. In the name of lower price, there has been no compromise on quality by Apple.
Deutsche Bank has reiterated its price target of $850 for AAPL stock.
"Starting at $329, Apple left a modest price umbrella for competing 7-inch tablets," Apple Insider quoted Needham & Co.’s Charlie Wolf as saying.
"However, none compare with this device, in our opinion, which is a fully featured iPad except for its size. All 275,000 iPad applications can run on it without modification."