It’s generally a rule of thumb for a company to produce a product that could be profitable but if you are already one of the wealthiest and most respected in the industry, that metric isn’t always required. Case in point is Google’s upcoming Nexus 7 tablet, a device that the search giant is putting out primarily to compete with Amazon’s Kindle Fire and the Barnes & Noble Nook Tablet. The $199 price tag will certainly make it competitive but is Google going to make enough profit from each sale to be worth their while?
Research firm UBM TechInsights believes it is costing Google $184 to manufacture each Nexus 7, leaving a sparse $15 profit margin at the end of the day. In contrast, it is believed that Amazon makes $46 per Kindle Fire sold while Apple generates a profit of around $170 per iPad, so why would Google even bother with such a low margin product?
There are a couple of compelling reasons, actually. First, if consumers shopping in this price range are buying the Nexus 7, that means money isn’t being sent directly to their competitors for their tablets. It could be as simple as that, but CNET also points out that Google is probably hoping to generate additional revenue streams based on tablet use. The majority of this revenue is likely to come from advertising, the publication says.
Google is expected to launch the Nexus 7 tablet within a couple of weeks. Be sure to check out our hands-on review later this evening for a full evaluation.
Amazon sent a wave crashing through the mobile industry when it announced its Kindle Fire would land with a price of $199. This is likely the best value in a tablet on the market, and will make tablet computing accessible to many people that either couldn't afford an iPad or couldn't tolerate Honeycomb tablets.
The Apple iPad (3rd-gen) includes a Retina Display operating at a resolution of 2,048 x 1,536. Powering the new iPad is a dual-core A5X processor with quad-core graphics, it also gets upgraded optics in the form of a 5MP backside illuminated sensor that features a 5-element lens, IR filter and ISP built into the A5X chip. Apple claims The new iPad is good for 10 hours of battery life and nine hours when using 4G LTE.
Downloads and Drivers
From the Forums
Subscribe to TechSpot
Receive a weekly update of our best features and tech news you don't want to miss: