It can work either way. They could lower their prices, because otherwise people will move from Apple to the cheaper devices. On the other hand, if the price c

It can work either way. They could lower their prices, because otherwise people will move from Apple to the cheaper devices. On the other hand, if the price conscious consumers move to competitors, they may raise their prices (because only people willing to pay a premium are interested anyway.) Empirically, their are many examples of competition leading to lower prices. But the entry of low cost generic drugs have historically caused the associated branded drugs to raise their prices. It's hard to predict which way it will work in the tablet market.