Google selling Nexus 7 at a loss not cost

first_imgGoogle’s Nexus 7 tablet wasn’t exactly a well-kept secret, but they still rocked the tablet world when they revealed it at Google I/O 2012. One of the more surprising revelations: when Android chief Andy Rubin later revealed that Google was selling the tablets at cost.Now, a teardown report has confirmed that… sort of. UBM Tech Insights’ analysis pegs the 8GB Nexus 7 tablet’s bill of materials at around $184. That’s $15 shy of the selling price, of course, but that doesn’t take into account several other costs.There’s that $25 Google Play credit for one thing, though that’s probably being written down as a marketing cost — the same goes for the digital copy of Transformers: Dark of the Moon. Google is also shipping the Nexus  for free $14 in the United States. When you add in R&D costs, it’s hard to imagine that $15 would cover everything.That doesn’t matter to Google. The Nexus 7’s mission is to advance the Google Play store and boost mindshare with consumers. It’s still a distant second to Apple’s store right now, and Google’s OK with offering up a loss leader in order to close the gap.They may also be hoping that shoppers will opt for the 16GB model, too — a good possibility since the Nexus 7 doesn’t feature a miscroSD expansion slot. The $50 premium for the bump from 8GB to 16GB more than covers the cost of a little extra NAND. Most industry estimates peg that at around $7-8, so it certainly seems like Google stands to pocket a few dollars’ profit when Nexus buyers opt for the increased storage.More at Fudzilla and UBM Tech Insightslast_img

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