Even with Microsoft's release of its new Windows 8 operating system, and first ever tablet, the Surface Oct. 26, Apple has once again dominated the hype cycle this week. This time though, it may be for all the wrong reasons.

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Consumers are clearly excited about the Nov. 2 release of Apple's new smaller iPad, the iPad mini, but will the device's "pixel poor" display quality and higher-than-expected price hold it back?

In what may be a sign of things to come Apple delivered lackluster quarterly results and iPad sales fell short of Wall Street targets, pushing its stock slightly lower this week. But, Apple is not backing down from their $329 price point for the iPad Mini.

Speaking to the media at its San Jose, Calif. Event Oct. 23, Apple CEO Tim Cook revealed that "the iPad mini has higher costs and gross margin is significantly below our corporate average," suggesting the company couldn't have priced it any lower or it wouldn't be able to turn a profit on the device.

A stark contrast to Google's Nexus 7 tablet and Amazon's Kindle Fire line, which each hover around the $159-199 range, and yield almost no profit, in favor of tapping into streams of revenue in app sales, etc.

Apple wants to caution consumers that while its iPad Mini is close in size to other 7-inch tablets (7.9-inches), its product is a step above the rest because of those extra .9-inches, which add #7 percent more screen space, according to the company.

"One of the things we try to do is to create a product that people will love for months and years and continue using," Cook said.

"That's what iPad mini is designed to do. You can see that more broadly on iPad by looking at the usage statistics. Over 90 percent of web traffic from tablets is from iPads. Apple will not make a product that somebody may feel good about for the moment, but then won't use when they get home. That's not the experience we want our customers to have. I would encourage you to use an iPad mini and I don't think you'd be using anything other than an iPad once you do that."

Apple also wants users to know it chose this screen size and resolution so as to make things as easy as possible for its developers and apps. The display size and resolution of the iPad mini give it a total of 786,000 pixels at 163 pixels per inch.

For comparison, the Google Nexus 7, which is made by Asus, has a screen that measures 7 inches across the diagonal and packs in 1280 x 800 pixels. The Nexus 7's display size and resolution give it a total of 1,024,000 pixels at approximately 216 pixels per inch.

Then there's the Barnes & Noble Nook HD. It also has a 7-inch display, with 1440 x 900 pixels. The Nook HD's display size and resolution give it a total of 1,296,000 pixels at approximately 243 pixels per inch.

Clearly the iPad Mini's display is lacking when it comes to the number and density of pixels. But, the smaller screen, lower pixel count, and slower processor also help keep the price down.

"Brightness plays a big role in the quality of the display, as does the underlying screen technology (LCD, IPS LCD, Super LCD, OLED, AMOLED, Mirasol, e-Ink, etc.). The quality of the manufacturing and the glass placed on top of the display play a role in how good it looks, too," notes Information Week.

Despite drops in sales, and consumer consternation over the price, though, Apple's confidence in maintaining its share of the tablet market doesn't look to be shaken.

"I haven't played with the Surface yet, but what we can tell is that it's a fairly compromised confusing product. You could design a car that flies and floats, but I don't think it would do any of those things particularly well."

Starting at $329, the iPad Mini is pricier than other mini tablets, but the product will still capture sales from lower-priced rivals, according to J.P. Morgan analyst Mark Moskowitz.

Though the price tag on Apple's new smaller tablet was substantially higher than J.P. Morgan's prediction of $249, the features and specs were better than expected. Moskowitz estimated that the base model would start at 8GB of storage, but Apple doubled that with 16GB. The Mini lacks the Retina display of its bigger sibling, but Moskowitz was still impressed by the "look-and-feel" of the small tablet.

"In our view, the larger screen size and iOS 6 capabilities of iPad Mini stand to be good enough to grab share from the $199 tablet crowd," Moskowitz said in an investors note released Oct. 23.

"We think the iPad Mini, coupled with the 4th-gen iPad, underscores Apple's accelerated refresh rate of important devices and software," Moskowitz said. "With the iPad Mini and the new 4th-gen iPad, we believe Apple does not plan to forgo the profitable parts of the lower-end segments in tablets."

Not everyone agrees the mini will a viable threat to Google's Nexus 7 and Amazon's Kindle Fire. Demand for those competing devices is unlikely to be much affected by the launch of the mini given the significant price gap, Nomura Equity Research said.

Although, the higher price makes it less likely that the device will eat into Apple's margins, the research firm said.

Barclays estimates iPad mini sales at more than 5 million units in the December quarter, while Canaccord Genuity forecasts sales of 9.25 million units during the three months. Apple sold about 17 million iPads in the quarter ended June.