Will consumers REJECT an iPad mini WITHOUT Retina? (UPDATED)

Obviously, no one at this point has any idea if the iPad Mini 2 will have retina or not, but all of the latest rumors are pointing to no. Assuming they are correct, and Apple simply updates the iPad mini, and sticks with the same 1024 X 768 resolution, will this device continue to sell in droves?

Recent numbers have shown a significant drop in iPad sales. Evidence would suggest that savvier consumers are waiting for the next iteration of the iPad and iPad mini, as the public generally accepts that they are coming in the fall.

But with the recent release of the new Nexus 7, with its 300+ PPI 7inch screen, and $100 price advantage, is this a really bad time for Apple to release a non-retina iPad Mini 2? My gut feeling is that this will not go over well with customers.

In the past, Apple has had the ability to beat the competition not on specs, but on amazing build quality. They aren't the cheapest, they aren't always the most specd out, but they make up for these deficiencies with amazing design, build quality, and all-in-one functionality. But things are different now, as Apple's competitiors have grown much more formidable (new Nexus 7), and they have (debatably) lost some of that cool factor (notice I wrote debatably).

It just feels like consumers are growing smarter, and they will see the new iPad mini, and say "wait, that nexus 7 has an AMAZING screen, runs android, and is $100 cheaper?"

Apple can not afford to just iterate anymore, this isn't 2007 or even 2010 for that matter.

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UPDATE: The Wall Street Journal, which we all know is basically a mouthpiece for Apple, is reporting that there WILL be an iPad Mini with Retina in 2013. My guess is that Apple is trying to trump the release of the Nexus 7 and tamper any excitement.