Respectfully disagree. I read somewhere an estimate that it costs them $200 to build and ship an iPad Mini they sell for $130 more. Maybe not iPad maxi margins, but pretty good margins none the less, IMHO.
And they still bring a new iTunes customer into the ecosystem that otherwise might have become a Kindle or Play Store customer. Just my .02.
It's not just me and I am not making this stuff up. The technical spec's speak for themselves. The mini is not a superior product to the competition, therefore it may not be stupid but it sure seems idiotic to price it higher than the competitions products.
It is not just the kindle the mini is competing with. Here is a link to an article that outlines all of the existing competition in this space.
I'm less familiar with the other tablets, so I couldn't fairly bring them into my post conversation... though I know there are some others out there to compete with.
Generally what I'm saying is this...
Without even trying to compete directly with those products, the iPad was selling similar to warm pancakes
So... if Apple doesn't introduce the iPad mini, people would still line up to buy the iPad.
Apple introduces an iPad mini that is slightly cheaper than an iPad and has slightly less capability than the full-size iPad... but still costs substantially more than its closest competitors.
The comparison between a Kindle and an iPad full-size is all the different/better stuff you can do with an iPad besides the books. The comparison between a Kindle and the iPad mini is less sexy.
I can talk someone into spending a little more for an iPad... even a lot more... but I don't feel like I can talk someone into an iPad mini.
I have an iPhone, iPad, and iMac... I also have an older PC and still run Windows in a virtual machine on my Mac... I think I can be pretty fair about the things Apple does right and the places where it is worth the money Apple charges.
All I'm really saying is... this late into the game... I'll be surprised if the iPad mini does much damage to the Kindle/other smaller tablet market that the iPad full-size wasn't going to do anyway.
And ever user that buys an iPad mini, is not going to buy an iPad full size.
As I said... I have an iPhone, iPad, and iMac... it makes zero sense for me to consider an iPad mini.
For the consumer who wants the iPad mini... Apple might lost an iPad sale (so that's maybe an equal profit margin trade perhaps) but they might also lose an iPhone sale as well... because that person might opt for a cheap smartphone to make up the difference they had to pay for the iPad mini over a Kindle or similar smaller tablet.
Only time will tell... I just don't think Apple needed small, medium, and large sizes to compete... I think small and large were option enough.