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Google Nexus 7 Parts Cost $18 More Than Kindle Fire
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."
Of course this doesn't bode well for competitor tablets. How many Google/Amazon business models are there that can afford to subsidize the tablets?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Shipping, packaging, advertising, and continued tech support costs are probably factored in.
This makes sense.
Andriod is really a platform for Google to sell their services (or promote ad based ones). It's not surprising they'll sell an at-cost device. They're also really nice machines, and set the bar for what a "low cost" device should really have. Fast quad core, latest OS, plenty of ram, access to google play(store). Great way to bump inferior devices off the market that would degrade user experience and cost them service revenue.
Even the small storage and lack of sd card is a "feature". - It provides a place to differentiate other tablet makers, who can add a card slot and more storage and charge a price premium over the nexus. (Well, that and the low storage encourages users to get their data from google online services rather than store it locally)
I recently picked up a galaxy tab 2 7.0 (Before google announced their offerings). Great little device. I love it, but clearly inferior to the new google equivalent. Sorta wished I waited.
What quantity is this costing based on? Something tells me that Samsung gets different prices that some Joe on the street, especially when buying something in millions of units at a time. Sure, a processor chip might cost $50 if you buy one and $10 if you buy 1000. What happens when Samsung buys a million of them, which could be the entire output of the manufacturer for several months? At those quantities you also have fun things like the buyer demanding that they get the right to go to other fabs so they can get the quantity they need - they essentially license the rights to produce the chip themselves.
Of course, it is then a short hop down the road to the manufacturer simply being added to the stable of companies owned by Samsung. Or not quite owned but invested in such that the manufacturer can produce the quantities that Samsung desires.
Such cost estimates are garbage because Samsung isn't talking about what they are really paying for parts. So all you have is guesswork based on public information. I would offer that neither Amazon nor Samsung is paying the sort of prices that are publicly available and special deals are being cut in exchange for who-knows-what.
In electronics there are three quantity levels that count: one, 1000 and the entire output of the manufacturer for months. When you scale up to the last one, the buyer gets to dictate what the price is going to be and the seller is pretty much at the mercy of the buyer.
https://play.google.com/store/devices/details?id=nexus_7_8gb
Because you don't know anything about Business.
Break Even doesn't equal sum(part) Break Even = Sum(Parts)+(Labor Rate+Benifits)/(Number of units)+(Total R&D costs)/Projected Unit sales+(Facility Costs)...
At $151.75 of parts and selling for 199 actually shows a really good work flow process.
Back during 1990's .COM boom a lot of companies didn't really understand the full cost on how to run a business, The consumers got flooded with a lot of inexpensive stuff (Which seems good) but then the companies shortly went out of business. Leaving us with cheap products that have no future. Or services that we enjoyed that went away, or have quickly gotten very expensive.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
I'm pretty sure that these devices have more than 1 and 2MB of storage. I don't expect editors to edit or anything, but are nerds seriously still having problems with the idea that the abbreviations for units are case-sensitive? K is not k and b is not B and so on?
Dude, I have had people (I assume they're people, then again this is /.) argue with me about whether or not it's proper to capitalize the letter i when using it in self-reference (i.e., "I'm not so dumb as to think I don't need to capitalize i when I self-reference"). Same goes for capitalizing the first letter of a sentence, and proper nouns. The way some folks bitch about having their capitalization corrected, you would think the Shift key killed their family and raped their dog...
Keeping that in mind, are you really all that surprised?
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Shipping, packaging, advertising, and continued tech support costs are probably factored in.
Hello, 2010 called and they want their distribution model back. This is Google; as soon as the device is assembled by their robot army, Larry Page winks at it while wearing his Google Glasses and a nexus portal opens on your front doorstep (which was previously triangulated to within +/- 0.1m by a Google Street View car) where the tablet materializes.
In rural areas not covered by Street View, a team of Google Glass-wearing skydivers will drop it by.
A CEO's time ain't cheap (neither is airplane fuel) but given how many they can churn out in an hour (and the 99.99% Street View coverage) the extra $47 goes a long way. Of course until the first lawsuit is filed because a tablet materialized through someone's cat.
Any half-competent CFO knows that hookers and blow is overhead and deductible as an employee incentive under "medical expenses". And as a side note, I've always wondered why non-marring razor blades and plastic straws dont come standard with tablets and their conveniently-sized glass covers? There must be an app for that??