A5 Dual core processor
16Gb Storage (baseline)
However, this doesn’t justify the pricing given. This product could have some success as a dumbed down iPad with lower specs and more portability without sacrificing the Apple ecosystem or the app store selection.
Unfortunately, Apple barricaded this from happening by giving an uncompetitive pricing, in my opinion, it should have been at least 50 USD cheaper but even 279 USD is pushing it. There are speculations that Google is going to push the 16Gb Nexus 7 to 199 USD and bring in a 32Gb version at 249 USD. The future does look grim for the iPad mini.
However, I do not think Apple is throwing out the iPad mini to compete with Android or other tablets. They are just offering their already built up loyal customer base a different product. There are certainly individuals that feel that the iPad is too large and the iPod touch doesn’t satisfy them.