You're overthinking it. Amazon is basically saying the iPad Mini is underpowered and more expensive. Yeah, what else is new? If Apple competed on tech specs and price, they wouldn't have sold a single Mac in the last 15 years. Price and specs is not why people will be buying the mini.
It's nearly impossible to compare raw specs when Apple is making their own chips. Android devices have had more cores and more Hertz than the iPhone for years, but only recently have they been able to start matching the iPhone in performance… that's that was entirely because of faster software.
My wife's (3yo?) Kindle Keyboard burnt out a couple weeks ago. The Kindle Paperwhite had a 6 week wait on it, so we waited an extra week for the Mini announcement.
The iPad Mini has a bigger screen, and is lighter than the Nexus 7 or Fire HD by a fair margin.
The press seems to be all about resolution and techie specs, but I just sold my iPad2 (to upgrade to a 4th gen), and a shrunk down iPad2, at half the weight, lighter than the competition by a decent margin seems like a slam dunk to me.
I guess time will tell, but if the primary use is as a reader, then the device with the biggest screen and the lightest weight seems like the obvious winner unless there's something horribly wrong with it. And there's certainly nothing horribly wrong with an iPad2.
People know Apple, they know how it will perform, they know it will run the Apps their friends talk about, they know the Apple stores are there if they need service, etc.
The iPad Mini, instead of being a bold play to kill the 7" tablet competitors is (unsurprisingly, perhaps) merely a smaller iPad. Maybe a somewhat cheaper iPad, but not an appreciably cheaper tablet at it's size.
And instead of shooting to further lower the price as advances roll down, it will almost certainly remain a smaller iPad, rather than a cheaper tablet; picking up the "retina" display and increasingly faster internals, rather than further cutting price. [1]
[1] Except maybe that odd $29 'bulge'. Apple doesn't seem to keep those around. e.g. IIRC the last-gen iPod Touch rocked a $229 price on entry, but as soon as they could they knocked it down to $199 and intro'd the new model at $299.
Don't most smartphone users have an Android phone? And wouldn't they therefore want to reuse the apps they've already paid for when they switch to a tablet?
This is purely a personal observation based on the people I know who have iPhones and Android, but I've noticed quite a differnce in the typical users.
Most of the iPhone users I know are at least reasonably passionate about their platform, are keen on tech (and therefore more likely to want a tablet) and have usually invested fairly heavily in apps.
Android users that I know are mostly split into two camps - the high-tech users who made a very conscious decision to go to Android, usually out a desire to be able to customise/have more control of their device. These people are again quite likely to be in the market for tablets, and have probably invested in their apps (although there seem to be more free ad-supported apps on Android, so the actual cash investment may not always be as high).
But there's another, and again purely from personal experience, much wider group of Android users. Those who got it cheap/free on their latest contract upgrade, who aren't that passionate at all about either tech or their platform, who have probably not downloaded many, or even any, apps on there. Much of my family, and many of my low-tech friends, are in this camp - they are Android users, but hardly aware of the fact.
If so it hasn't translated into any sort of "halo effect" for android tablets to date. I'm not sure why that concern would be expected to suddenly manifest after Apple releases a device.
No-one really seemed interested in Android tablets regardless, until Amazon dipped their toes in with a tablet that didn't make a strong 'keep your apps' case [1]. Google got some recent interest with a tablet offering potential cross-device support that's relevant to many more people, but absent sales figures it'd be a stretch to project either of those as evidence of an android halo.
Particularly given Android's particularly strong penetration overseas and Amazon/Google's notably US-centric introductions.
Beyond that, you're assuming Android users have lots of paid apps and notable numbers of those paid apps have tablet versions or still make sense on a tablet [2]. I'm pretty certain most Android users don't have such large libraries of paid apps that they'd present any meaningful consideration when choosing a tablet.
Particularly these days when every app outside of games and multimedia editing apps is just a front end to a web service that offers both iOS and Android clients.
[1] An offering where you could probably get some existing android apps to run, but not through methods non-tinkers are likely to suffer. (Installing a second store? Sideloading?)
[2] e.g. if we're still talking kindle fire/nexus 7, there's no cell data. GPS info is limited compared to a phone. Camera apps may not be worth it with lesser sensors. etc.
Even on iOS I would be surprised if many people used the exact same apps on their phone and their tablet. Aside from some 'universal' games -- things tend to make sense or not largely based on form factor. And the outliers people do use on both, anecdotally at least, are overwhelmingly 'consuming web service' types of apps. (instapaper, facebook, etc)
Apple devoted a whole segment of their iPad mini pitch to showing that Android tablet apps are often just upsized versions of the same UI as for phones, whereas iPad apps tend to be more often designed for the iPad screen.
Whether you believe this or not, this is what Apple are telling consumers about app reuse on Android vs iOS.
Sure they would. However, the Android market has not caught up to that yet. I base that on the Android forums I am reading. Android probably has a year to go before that is "true".
