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Apple’s iPad Mini: Small in Size, High in Price

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Apple's (AAPL) latest product release, the iPad Mini, was greeted with a thud by investors as the stock tumbled as much as 2.5% following the unveiling this afternoon in San Jose, California. The smaller, lighter version of the company's hugely popular tablet seems to be aimed squarely at smaller, cheaper competitors like the Amazon's (AMZN) Kindle Fire and the Samsung Galaxy Note.

But perhaps it was the price point, $329 to start that got investors nervous, as shares immediately reacted to the downside once those details were revealed.

"We actually think a higher price point to some extent is a good thing for Apple," S&P Capital IQ senior equity analyst, Scott Kessler tells Breakout. "It's still lower than the lowest priced iPad that's out there."

Kessler points out that Apple has become incredibly adept at delivering superior products that consumers are willing to spend more on and he believes the iPad Mini is no exception. He does admit, however, that the lower price point (compared to the full-sized iPad) and the fact that it does not come with the mobile carrier subsidies the iPhone does, means "the economics aren't as favorable now as maybe Apple's other products are."

Still he's bullish on the stock. Despite the post-announcement dip, Kessler has a buy rating and a 12-month price target of $800 a share for Apple.

Despite the typical post-announcement funk, the iPad Mini "looks like a great product," says Kessler. "We think it's gonna sell very well and…we think the product is frankly a lot better than what's in the marketplace."

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