The report claims that Apple will price the new 7-inch iPad in the $200-$250 range and the device will “be identical in every way” to the current iPad, with exception to the display size. If the smaller iPad retains the Retina Display of the new iPad, its pixel density will come close to that of the iPhone 4 and 4S.
“According to our source, which has proven reliable in the past, the reason for such aggressive pricing is to do to the tablet market what Apple did to the MP3 market in 2004 with the expansion of the iPod product line — leave absolutely no space for competitors.” — iMore
If the specs are identical, the new iPad reaching the $200-$250 price point could spell problems for Apple’s traditionally high margins unless they have managed to negotiate some insane component prices in their supply chain. Also, if the price point is to be believed, Apple would likely jeopardize sales of their iPod Touch line which starts at $199, unless of course they lower the price (something that has lesser possibility).