The Google Nexus 7 Is the Right Kind of Cheap
Google's $200 tablet is a better value than Amazon's $200 tablet, not just for consumers, but for Google, too. With the same price tag, early reviewers compared the two devices as the low budget tablet option, finding that Google's had a more expensive feel. Now an IHS iSuppli tear down has found the the 8GB model costs $151.75 to make, $49.95 cheaper than it took Amazon to make the very first Kindle Fires. Now, the cost of making the Kindle Fire has come down to $133.80 from that original higher price because of a drastic reduction in component parts, making it a tad cheaper than the Nexus. But, component parts tend to go down over time, IHS iSuppli told the Wire, so Google's parts costs will decrease eventually, too. But despite spending less than Amazon, at least at the get-go, Google has not only given consumers what the techies say is a nicer device but figured out how not to lose on each sale -- especially if they get consumers to spring for the 16GB model, which runs a $250 price tag but only costs an extra $7.50 for Google to make.
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When the Nexus 7 came out, analysts suspected that Google would follow Amazon's Kindle Fire strategy and either deliberately lose money to build market share with a cheapo tablet. When the Fire was announced, Amazon CEO Jeff Bezos admitted the actual device wouldn't make money, hoping to make the money back when people bought content from Amazon to fill their shiny new devices. Google never called their tablet a loss leader, but Andy Rubin, Google's senior vice president of mobile, did allude to it when he told AllThingsD's Ina Fried, "When it gets sold through the Play store, there’s no margin.
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Even with the smaller costs, though, Google somehow got nicer stuff inside their version. The tear down revealed a better display, with a 1,280 by 800 resolution, versus the Kindle Fire's 1,024 by 600. It also has a camera and NFC capabilities that the Kindle Fire lacks. That all upped the cost to build, leading IHS iSuppli to figure the Nexus 7 costs about $18 more to make then the Kindle Fire. But your you, it's still $200; And for Google, it's still less than $200. So, unless the content is a real deal-breaker -- and for some it is -- the Nexus 7 sounds like the better buy.
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