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Google Nexus 7 Parts Cost $18 More Than Kindle Fire

Posted by timothy on from the business-model-is-what-matters-though dept.

judgecorp writes "The parts for a Google Nexus 7 tablet cost only $18 more than the materials for an Amazon Kindle Fire, according to a teardown by IHS. This means while Amazon initially took a loss on each tablet sold, Google will break even on its 8Gb tablet, and make a small profit on the 16Gb model."

2 of 146 comments (clear)

  1. Re:OhmyGOD yes!!! by DC2088 · · Score: 5, Informative

    Shipping, packaging, advertising, and continued tech support costs are probably factored in.

  2. Re:In what quantity? by jrumney · · Score: 5, Informative

    You don't really get massive mark-downs for volume - maybe 70% difference from 1 to 1 million.

    I don't know which branch of electronic manufacturing you're talking about, but the one I'm familiar with has a MASSIVE per unit cost difference between buying one off components and buying them by the reel, and another big cost drop once your volume becomes high enough that the component manufacturer will deal with you direct instead of having to go through a distributor.