Bloomberg also confirms the iPad Mini story, resolution to be the same as on the iPad 2
The affordable Google tablet has a clear goal - to expand Android's market share even further, locking in ever more people into the world's most popular search engine ecosystem. An eventual iPad Mini is an answer to that, and something tells us if it materializes it will also be because of Microsoft's foray into the ARM-based tablet market as well.
Apple can't allow itself to lose market share against these two formidable threats this year, and a cheaper tablet with its logo is a pretty clever way to fight that eventual trend, even though pundits always said it will never make something affordable for the sake of gaining market share, as it tries to keep its things exclusive, hence commanding a brand premium.
As far as we know Apple, however, its rumored iPad Mini may be cheaper in comparison with the new iPad, but that doesn't mean that Cupertino won't earn a pretty penny off of it, unlike Google. It basically fronted Sharp north of $1 billion to put in its Kameyama plant more IGZO display equipment, so the eventual 7.85" display of its smaller tablet will most likely come very cheap in comparison with what the other manufacturers can achieve, and this is the single most expensive part of a tablet.
If Apple sells it for the rumored $249-$299 range, the Galaxy Nexus would have an issue on its hands, since Apple might still muster more than 30% gross margin on the product, and given the much richer tablet apps ecosphere it has, thanks to three iPad generations, it will sell many millions without a doubt. What do you think, does an iPad Mini make more sense for Apple now after the Nexus 7 and Microsoft Surface announcements?