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Here's How Much the iPad Mini Won't Cost

NEW YORK ( TheStreet) -- It's all but certain now that Apple (AAPL - Get Report) is going to announce an iPad Mini later this month, but what isn't certain is how much it will cost.

Leaked images show that the iPad Mini will start at $249 for the 8 GB, then go all the way up to $649 for a 64 GB version of the device with cellular connectivity, presumably through AT&T (T) and Verizon (VZ). ( Sprint (S) carries the iPhone, but not the iPad).

TheStreet recently ran a poll asking readers how much they think the iPad will cost. Just more than 30% of those surveyed expect Apple will charge $349 for the iPad Mini.

While there may be multiple sizes of the iPad Mini and perhaps even ones with cellular connectivity, it's hard to see Apple going as high as 64 GB for the device, namely since it would cannibalize sales of the iPad that much more.

Barclays Capital analyst Ben Reitzes, among several other Wall Street analysts, have made that point.

"Ten million units at a $250 ASP would amount to about $2.5 billion in revenue for Apple, not including some cannibalization of existing iPad and iPod Touch sales," Reitzes wrote in a analyst note. He rates Apple overweight with a $810 price target.

There is already going to be some cannibalization of the traditional 9.7-inch iPad by the smaller tablet. That much is assumed.

Apple has traditionally cannibalized its own products (iPhone/iPod, iPad/MacBook), but that's either been feature cannibalization or price cannibalization based on a different form factor. Pricing the iPad Mini as high as $649 would cannibalize the larger iPad, as well as make less competitive with other 7-inch tablets, such as those from Amazon (AMZN - Get Report) and Google (GOOG - Get Report).

Apple has by and large never competed with competitors on price, so launching a 7-inch tablet isn't going to be about pricing itself to match competitors. It just doesn't make sense to cannibalize one of its own products at essentially the same price. That isn't the Apple way.

One thing that is certain is that Apple is placing bets on the iPad Mini becoming its next hit product. Reports earlier this month suggested that Apple has placed orders for more than 10 million units of the iPad Mini. Barclays' Reitzes also used the 10 million figure, so there appears to be credence to this level.

It looks like we'll have to wait until Oct. 23 to find out for sure.

Interested in more on Apple? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

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