Nexus 7 Generates A Profit Of $15 Per Unit


09.07.2012

Nexus 7 Generates A Profit Of $15 Per Unit

Nexus 7, the 7-inch Android 4.1 Jelly Bean tablet co-developed by Google and Asus was officially introduced on June 27th at Google I/O event. The tablet hopes to lure the customers with its really attractive prices.

As you probably know, the 8 GB model has a price tag of only $199, while the 16 GB Nexus 7 costs as much as $249.

Amazon’s tablet inspired the search engine giant to develop a cheap tablet with high-end specifications, after the Kindle Fire quickly climbed to the top of the best-selling Android tablets. The online retailer giant is losing money with each Kindle Fire it sells, but it recoups and makes profit due to the paid¬†services that come along with their $200 device.

On the other hand Google and Asus managed to develop a similar product that is capable of generating a small profit. For only $199 you will get a 7-inch HD IPS display, quad-core Tegra 3 chipset, 8 GB of internal storage, 1 GB of RAM, front-facing camera, WiFi, Bluetooth and a 4,325 mAh battery.

After Tech Insights¬†gave the Nexus 7 the “teardown” treatment, they were able to estimate the production cost. Google Nexus 7′s production cost is $184, therefore each unit generates a profit of $15, but Google and Asus will also have to recoup their budgets for marketing.

On the other hand it’s obvious that Google launched the Nexus 7 to be able to generate more revenue from Google Play and the services related to their app store, but also to penetrate the tablet market. Nexus 7 might be Google’s first step in the attempt to take on the iPad and the rumor mill speculates that the Mountain View-based giant is also preparing a 10-inch competitor for Apple’s and Microsoft’s tablets.

Apple is aware that a cheap quad-core tablet would harm their market share, so it was reported that the Cupertino-based tablet maker is readying a $300 7.85-inch iPad Mini.

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