We know that Google and Amazon are following that model and some other vendors also are dumping their tablets simply to lock users into a particular ecosystem. Will the iPad mini kill all other tablets? Apple could price it so aggressively to do that. However, we assume that people will rush to buy one that perhaps wanted an iPad but couldn't previously afford it.
The cost of a regular iPad has been in the $499 range for a while. The old one, which eventually will be discontinued, is currently at $399. The iPad mini will likely come in at $299 at the very least, if not the mid-$300's. I doubt there will be a 3G/4G version. It will likely be only Wifi but who knows.
This makes the iPad more than all the other mainstream 7" tablets, which for now are at the $200 entry-point. For that money, though, you are biting into a piece of Apple's ecosystem and that has been the main selling-point. Just how important is it to have access to iTunes vs. Android vs. Amazon vs. Blackberry App World? The market has already shown it's preference.
It will all boil down to the costs and numbers of people out there still looking for a tablet but did not feel the need to pay $400-500 for one. The lower end of the market, already populated with tons of cheap Android tablets, has been available for some time. Is there an unmet need for an iOS tablet to live in this space?
Most people who already have tablets would not be running out to buy another tablet, even if it was an iPad mini. People who do not have a tablet may feel the urge to hop into the Apple ecosystem at a lower price-point. This is not necessarily cannibalizing their iPad 10" sales, or is it? Perhaps parents with a regular iPad want to buy their children something smaller and cheaper so they leave their larger tablet alone!
One thing is for sure. With iPad mini coming, if rumours are to be believed, the 7" tablet space is about to get more interesting and competitive, which is good for consumers. I for one will not be rushing out to buy another tablet any time soon. I have my Blackberry Playbook which serves my needs well.
However, we have seen iPad dominate when faced against similar priced tablets in the $500 range. So if the iPad mini comes in at $299, it may create some pressure on Google Nexus, Samsung Galaxy 7 and Amazon Fire. I do not even mention the Blackberry Playbook because we are seeing it on sale now for $150 at some places. It appears to be getting "dumped" already just to clear shelves, and at that price some people are getting it... But even at $150 there is no mad rush.
Apple will use their big marketing dollars to make iPad mini a must-have item. I hope there is room left, beyond all the marketing-hype, for the other tablet-makers to thrive. There are plenty of great apps and tablets besides iPad, despite the number of sales and profit Apple has made.