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I don't own an iPad and I just bought a mini. It's my first tablet device.

Didn't mean for anyone to take me too literally. What's I'm trying to say is I think you are in the minority. Perhaps 80% of the Mini's buyers will be previous iPad or iPhone owners. (whereas with the iPad or iPhone maybe 50-60% are brand new customers)

Or maybe I am just completely out of touch with the US consumer and their purchasing priorities (I am from Canada)

I think the market for the mini is huge, specially around the holidays. Not everyone will pay the premium, but Apple doesn't need to get all of them.

As you said if it's only previous iPad or iPhone users there are a lot of those.

What about people with small hands ? Maybe you hand your kid a $329 device that fits his hands instead of a $500 that's too big ?

Getting and ipod touch for your kid ? Bump him up to a tablet ( if he doesn't take it to school everyday )

People that like the kindle form factor will also be tempted.

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