Price the iPad Mini at $299, and it goes up against the new iPod touch and the mid-level iPhone 5. What’s the differentiation? Both have the A6, both have 32GB. (I keep mentioning the CPU, because that’s what will determine how long you’ll be able to continue upgrading your iDevice with the newer versions of iOS. You can save money, but you’ll lose probably one year of future iOS updates.) At this higher price, you’d still only get half the storage as the competing iDevices. You lose Retina. And you lose CPU speed in comparison. This does not seem like an as-good purchasing decision.

We can’t bump the Mini’s price to $399, because pricing it exactly the same as the iPad 2 just makes no sense. The only differentiation would be the size of the screen, and nobody is going to pay the same for less. At least I don’t think they would.

Let’s try $349. Would you take a $50 off (about a 15% discount) from the iPad 2, for the same specs and a screen one-third smaller? To me, that just isn’t a compelling decision. At $399 iPad 2 puts a pretty low upper limit on a sensible price for the iPad Mini. And then there’s the competition, which sells plenty of 7″ tablets for $199, or even less.

So let’s revise that table.

Things are starting to get crowded in that $199-$299 zone, but I think that’s OK, because $300 is usually considered the upper limit of an impulse purchase. And Apple can make the sales pitch that, yes, you can buy some cheesy 7-inch Android tablet with far fewer apps and a so-so screen for $199, or you can run all your iOS apps on this beautiful new Apple-engineered almost 8-inch tablet.

That, I think, would be a pretty compelling case for a lot of consumers.

So I take it back. There is room in Apple’s price structure for an iPad Mini. And the sooner, the better.

*****

Cross-Posted from Vodkapundit