[gnaffle]

I doubt it will be more expensive. After all, they still sell the iPad 2 for $100 more than the Nexus 7. The only other advantage would be price. Apple's been willing to cut some corners to achieve price before, for instance the iPod displays are (or used to be) worse than the iPhone ones even though they had the same resolution.

[BvS]

Don't they sell the iPad 2 for 400 US$? This would be at least 150US$ more than the most expensive Nexus 7 and 200US$ more than the standard version or the kindle fire (assuming the next version won't be more expensive). I'm sure Apple could meet the price point or even undercut it (bear in mind that Google ads 25US$ credit for the Play store) but that would mean their margin goes down a lot. I'm not sure Apple is willing to go down that route.

I guess what I'm trying to say is that I don't believe that Apple is going to release a product that is inferior in some main aspects (eg screen resolution) and trying to compete on price.

[fab13n]

> I don't believe that Apple is going [...] to compete on price.

Probably not on price, but on market share. iPads currently are the only decent game in town, except for the e-reader niche; they're safe as long as Android doesn't reach a critical mass, which would allow a healthy apps market to develop, and competitive HW prices to be reached through economy of scale.

That's worth giving up some gross margin, and even cannibalize part of the iPad 3's market share. I don't know how they'll address the Nexus 7 threat to their monopoly; through a 8'' tablet, by further dropping the iPad 2's price, by litigation or other means... but they will fight back with all their might.