If the rumors are true, the iPad mini screen will have 40% more area than a standard 7" tablet, so not exactly an apples to Apple comparison when it comes to pricing. It's really in a class by itself, IMO, at 2/3 the size of a standard iPad.
The key will be the price. A lot of people that have a 7" tablet got one because they are fairly cheap. With normal Apple pricing, thy still may not be able to crack the market. It will still be at a premium.
One way to compare faily might be "sq in" pricing. A 16GB Nexus 7 at $225 (after the play store credit) is $10.23 per sq in. A 16GB iPad mini at $299 would be $9.97 per sq in, so comparable. (By comparison, a 9.7" iPad2 is $8.86 and an iPad3 is $11.09 per sq in.)
Image from: Cult of Mac.
Edited by Steve, 04 October 2012 - 08:33 AM.