[Another recent BOM analysis, by Ming-Chi Kuo of KGI Securities as , had a very similar BOM total starting at $195 and a starting retail price matching Singh's at $299. Both see Apple continuing to accept lower margins on its tablet line compared to the iPhone.]

"I really doubt an iPad mini buyer would consider substituting it with an iPod touch or vice versa," Singh says. "My guess is that when consumers are making a buying decision, the natural impulse is to compare products competing in the same category.

"For example, I haven't seen anyone question why most tablets are cheaper than unsubsidized high end ," Singh says. "It's because consumers are comparing prices of, say the [Samsung] Galaxy S III versus an iPhone and not an iPad versus an iPhone."

Looking only at the range of all Apple price points is misleading he suggests because the key is how the pricing of each product category is structured.

Singh is sticking by his prediction that the small iPad will have a starting price of $299, though he now says he's somewhat less certain about that. Apple could be more aggressive with a price closer to $250.