The Implications of $329

The new iPad mini is here and it starts at $329.  Google's Nexus 7 sells for just $199, purportedly a break-even price.

Apple's iPads have been selling with a gross margin of about 33%. If the mini is true to form, then Apple's cost is more than $220. And Apple can out-manufacture anybody. Nobody can match Apple's incredible production chain. If Apple can't built it for less than $200 nobody can.

Unlike the Kindle Fire, the Nexus 7 does not have reduced specs to save money. Yes, it may have some parts that are inferior to the iPad mini, but that difference will be swallowed up by Google's necessarily lesser ability to manufacture it. 

Google is losing money on every sale of the Nexus 7.  Perhaps $20, perhaps more. But breaking even it most assuredly is not.