Here's a graphical illustration of why it'll probably be priced lower than $299, whether at $249 or $199:

http://www.iamconcise.com/main/the-reason-for-the-ipad-mini....

Apple has an excellent track record of not leaving price umbrellas under their products (even if it means releasing something super minimal, like a Mac Mini or iPod shuffle) nor do they usually create multiple products at the same price that cannibalize each other.

The second rule isn't as strong because it isn't nearly as big a problem as price umbrellas. They've often said (correctly) that if anyone's going to cannibalize their products it might as well be them, e.g. iPod sales declining because of the iPhone taking off.