I think the better question is, is the iPad mini $170 (74%) better than the Nexus 7. Unless you're really invested in the Apple ecosystem, I don't see the draw of the iPm over the N7. I've hardly seen them out in public either, bookstores, coffee shops, etc. I see tons of ~10" iPads and ~7" Android tablets, but few iPm's and few ~10" android tablets.
For me, it's just not enough screen. I have a ~10" 3rd gen iPad for web-browsing and entertainment and a 6" Kindle touch as a reader.
For me, the iPad mini is worth the extra money simply because I find the Nexus 7's screen a bit too small to be a do-everything tablet. Surfing the web on the N7 is cramped. It's amazing for reading books and games, but for other web-related tasks it's too small.
I think that's a question for very very few people. The A7 is far, far higher performance than an underclocked Krait 300. The Nexus is a budget tablet in comparison the the iPad... it's plastic and anybody to whom $170 is a big enough deal to drop both performance and aesthetics isn't going to buy an apple product anyway.
If you were to ask this about the last generation, you'd be right because the Nexus is much better than the old mini in performance (but not aesthetics). In this case, the Nexus has been outclassed
The A7 is a great performer, but the Nexus 7's quad core is no slouch either. The A7 is definitely faster in benchmarks, but I don't think people will be buying the iPad mini over the N7 because the N7 performs badly - it performs great!
A nuisance of both the iPad mini w/ retina and iPad air is that they only come with 1GB of RAM, and 64-bit apps have an even larger footprint than 32-bit apps. The Nexus 7, meanwhile, has a nice, beefy 2GB of RAM, meaning webpages and apps don't get purged out of RAM nearly as often.
With respect to the iPad mini w/ retina, you're paying your money:
1. because it's an apple product
2. for the superior build quality - aluminum, very thin glass/screen/touch layer
3. for Apple's tablet ecosystem (which is better)
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If the Nexus 7 was an 8" tablet with something like a 1920x1200 screen, it would be a tougher call for me. Having used both the iPad mini (non-retina) and Nexus 7 extensively, I can say that I prefer the width and extra screen area of the iPad mini's screen over the N7 enough that I'm going to go for a retina iPad mini as my exclusive tablet once I can get my hands on an iPad mini w/ retina.
The Nexus 7 makes a fantastic
second tablet, though. One thing is that 5"+ smartphones are somewhat eroding the N7's value, and I feel like something in the 8" range (+/- 0.2") is a really nice tablet sweet spot.