There have been a lot of talks regarding the iPad Mini, the rumored 7.85 Apple tablet and now we have a detailed analysis of what the new product could actually be and its reason to exist. During a recent conference call Tim Cook mentioned that the Cupertino giant won’t leave a “price umbrella for people”. This is the situation when a dominant company with big market share keeps high prices leaves an opening for new rivals to enter lower price tags.

The iPad had a price umbrella at $499 till recently, so rivals could enter the market at lower prices and do some disruption on Apple’s expense. The Nexus 7 is one of the models doing that disruption, just like the Kindle Fire 2 is supposed to. Apple could solve the umbrella problem with the iPad Mini, after fixing it with the iPod and iPhone. With the iPod they created the Nano and Shuffle models, both cheaper than higher end players they sell. The iPhone 3GS is the model that’s now old hardware and it’s been selling very well on very low prices.

So, it’s either they create a new product line or keep selling the old hardware, or maybe get another company to subsidize the product. Well, the iPad 2 is already selling at $399, so the cheaper product part is covered. If Apple wants to tackle the issue of rivals with quad core tablets at $199 price points, they will need the iPad Mini. So, it makes sense logically, as revealed by the graph above. Many will perceive the product as a “non premium” device, so Apple must be careful here.