or simply drop the prices of current 8/16gb version to prime them to fly off shelves this holiday season!
Let's go with the theory that Apple will not release an iPad Mini. Just as a theory, mind you, because it's a rumor at best (of course, so is the possible existence of an iPad Mini, but I digress...).
What about Apple NOT releasing a competing product (assuming it ever would have been one) makes you think that Google is going to DROP prices on a product they are already breaking even on at best?
If Apple doesn't come out with something in response to Google's current shot across the bow of the USS Cupertino, Google wins this battle. They don't need to keep firing ammunition. Google's Finance and Marketing departments will get together and build something even more Apple-threatening (Nexus 4 to compete with the iPod Touch and Nexus 10 to compete with the iPad, both 100 clams cheaper than Apple's offerings, maybe?). Or they'll add more awesomesauce to the Nexus 7 but charge accordingly.
If Apple does come out with the rumored iPad Mini in the 6-to-8 inch range with a competitive price point to the Nexus 7, THAT'S when things start getting awesome for us consumers, because Google will be forced back into the fight.
And the Nexus 7 is some pretty strong ammunition.
Personally, I'm really hoping Apple and a few other competitors DO come out with something that can compete with the Nexus 7. Amazon has already responded. The more people in the battle, the more we all win.