Slashdot Mirror
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."
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.
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??
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.