*Why Apple’s new iPad mini will be the dominant 7 inch tablet despite a price tag twice that of the competition*

Americans are an inherently silly people. You can understand our politics only if you get that most Americans, or at least enough to make a difference in elections, vote *aspirationally*. That is, they don’t vote for the candidate who will do the best job for them now, but for the candidate that will do the best job for who they want to be. The fact that most of them never get there doesn’t enter into the equation. So we have laws and tax codes strongly favoring the rich not because our population is rich, but because they *want to be* rich, and it will be nice if the laws are in their favor when their ship comes in.

We aspire to a lot of things, and stretching to get some status symbol ultimately minor in the grand scheme of things makes people feel like they’re closer to “making it.” This is why people buy a BMW when a Toyota would have fit much better into their budget. Why they buy a house bigger than they need. And it’s a big part of why people will spend $3000 on a retina Macbook Pro when they could have got a Windows-based laptop almost as good for a third of the price. Apple understands aspirational purchasing, and it’s a big part of why they’re the most valuable company on Earth.

Next month, I believe Apple is going to do it again. They’re going to announce a new class of device, a 7.85″ iPad. Contrary to most of the rumors I’ve seen going around, I think this iPad will replace the iPad 2 starting at $399 and use the same 2048×1536 screen resolution as the third generation iPad. Essentially, it will be a scaled up iPhone 5 without the phone and running the iPad face of iOS. Same A6 processor, same 326ppi glass, same Lightning connector.

Because it will allow them to discontinue the iPad 2, their last non-retina iOS device now that iPhone 3GS is gone, this means that Tim Cook, master of the supply chain, will be able to use the same glass on all the production iOS devices but the iPad 3, saving Apple money. By using the same A6 processor and Qualcomm LTE chip as the iPhone 5, he’ll save Apple money. In fact all told I think he’ll save so much money that they’ll be able to make a modest profit on the WiFi-only, 16GB iPad mini at $399, and much heftier, Apple-sized margins on the models with more storage or LTE.

With the same display density and processor speed as the iPhone 5, the iPad mini will look absolutely stunning. Everything about it will scream “premium.” But the most important feature will be the prominent Apple logo on the back. Because with that logo on a tablet that thin, that light, and that sharp, Apple will sell millions of them to people who feel like they deserve better than a Kindle. And those people will pay twice the price of a Kindle and believe they’re getting a bargain.

Maybe they are.

Android tablets aren’t going away

There’s been a lot of yapping in the press recently about how Android is just about doomed in the tablet space, because of REASONS. The actual reasons vary, and none of them have much basis in fact, but speculation is what the tech press does before announcement season, and hey, inflammatory headlines make with the clicky clicky.

Ed Bott at ZDNet thinks that while he wouldn’t want to use an iPad as his primary computer because of the compromises Apple has made to the mobile experience, he can use his Windows RT (the ARM version of Windows 8) tablet to get actual work done. But a lot of the arguments he makes in favor of the Windows RT tablet work just as well, if not better, in Android. He says he can use a real file system in Windows RT. Same with Android. He can plug in a USB thumb drive and copy files back and forth in Windows RT. I do this all time with not only my Nexus 7, but my Galaxy Nexus phone as well. The problem here isn’t with Android’s capabilities, but rather with boomers associating Microsoft with personal computing. I think the next generation, entering the workforce now, won’t have that mental block.

Nilay Patel and Dieter Bohn at the Verge say that Google better get its act together or “watch from the sidelines as Microsoft mounts the first serious challenge to the iPad.” While I agree that Google needs to pick up its game if it wants to compete with the iPad, something it’s already doing with the Nexus 7, I see no evidence that Microsoft is serious about anything. If Microsoft succeeds with Windows 8, it will be in spite of Steve Ballmer, not thanks to him. Microsoft has made one boneheaded, consumer-hostile decision after another with Windows 8, and I think it’s going to go over like a lead balloon.

I think the tech media is wrong. And here’s why. Windows 8 is a completely new, untested platform. It has zero market share at the moment, and there’s no reason to think it’s just going to take over. The tablet/laptop hybrids Windows 8 is built for are a new class of hardware, which also hasn’t been tested by the marketplace. We don’t know if they are going to sell.

Windows 8 will gain market share on desktops and classic laptops because it will not only be the only choice when you walk into Best Buy (however long that lasts, I give BB 2 years before they follow Circuit City and CompUSA into retail oblivion), but also because Windows 8 prevents you from downgrading to Windows 7 or installing Linux over it. It’s a “security” feature. So a lot of consumers are going to get stuck with it when they buy a family PC.

But tablets? Right now, Windows (7) tablet marketshare is minuscule compared to Android tablets, much less the iPad. And we have no evidence at all that this will change when Windows 8 ships. I’ve said here and elsewhere that I think Microsoft will be lucky if Windows 8 is only another Vista. I think it may be the incentive for a lot of users to ditch Microsoft entirely. If you’re going to learn a whole new way of using a computer, why wouldn’t you go with a more tested, more widely used option like Android or iOS?

And while Android isn’t much of a player compared to iOS in tablets today, history tends to repeat itself. For a long time, the iPhone was the undisputed leader in smartphones. Now it’s got 17% of the smartphone market. Android has 68%. Until the Nexus 7, there weren’t many compelling Android tablets. They were too thick, too slow and too expensive compared to the iPad. The tables have turned, and now the iPad is running to catch up, trying to get into the 7″ tablet market.

In five years, I think Windows 8 tablets will be a footnote, the iPad will be a niche, boutique product and Android tablets will be the primary computer most people use. It has happened before. It will happen again.