I am designing an app for 9.7 inch iPads. I would like to know if anybody has any experience on how an app designed for bigger iPads looks on iPad mini? Does it scale down automatically, somehow that is perfectly usable on the smaller screen? Or should I take any considerations into account? I have not downloaded the latest Xcode, so I am not aware if it has an iPad mini simulator. But my concern is the Physical device, even if Xcode has iPad mini simulator.
From an app's point of view, the iPad mini is identical to an iPad 1 and iPad 2. The screen has the same number of pixels - 1024x768.
Of course the screen on the iPad mini is physically smaller. This is generally only an issue if you need to draw something that comes out to a specific physical size. An example might be if you need to display a ruler in inches or cm. Otherwise it's a non-issue.
There is no separate iPad mini simulator in Xcode. There is no need for one. The screen renders at 1024x768. This works for all non-retina iPads, including the mini.
From a usability point of view, an iPad app running on an iPad mini versus the other iPads, buttons and text will be slightly smaller due to the physically smaller screen. Some people may argue that some apps would benefit from using a larger font or bigger touch areas. But in reality this shouldn't be an issue. The iPad mini has the same DPI as iPhones and iPod touches. If people can use those devices OK then they can use an iPad mini OK.