@Marvin the Martian

"Why don't you look at HP's fabulous new ipad clone; it can do all that the ipad can, looks a bit worse and is chunkier and less sturdy (innovative combination), but it has this fantastically low price of ... exactly the same as the ipad."

Not in the UK at least for comparable models when I looked last week. The Apple UK store is down today. Perhaps they are dropping their iPad 2 prices, but I suspect they will in fact be going the other way in light of recent increases elsewhere.

Secondly, unfortunately it's not just the concepts other manufacturers are copying. They are copying the prices like sheep as well. Everyone sees Apple charging these kind of sums, so they would be mad not to do it. The price of these types of devices has steadily increased due to the Apple skew that you are happily paying for. Smart phones shot up dramatically after the iPhone came out as everyone went "hang on a minute" and got their noses in the trough. You paid, we all pay.

One thing Apple has done well is secure their own supply chain. So their overheads are much lower. So once they got all this in place they could ramp up their margins.

So consider this. Apple could easily sell their stuff for less and make, say 25%. They choose not too. In fact they put are putting their prices up.