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."

Stick, razor

[Anonymous Coward]

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.

In what quantity?

[cdrguru]

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.

Re:Stick, razor

[Anonymous Coward]

That sound you heard was the point of this conversation flying over your head. (And whoever modded you up)

Yes, Asus makes it.. But it's clearly a google product. That's how google is promoting it in every shred of marketing material I've seen.. The at-cost price would not make any sense whatsoever for Asus because they don't run the revenue generating end-user services. Google does.

Re:Doomed competition

[TheGratefulNet]

its refreshing to hear from the side that realizes 'the net' is not everywhere and always on at all times.

younger developers are too spoiled and assume too many things when they design things.

I don't have a 'data plan' and until they are affordable, I won't pay for one. if I'm out and about, its *not* assumed I'll have any kind of data connection. local storage always always works - WAN networks, well, not so much.

Re:Doomed competition

[Anonymous Coward]

Because you often use a tablet like this in places (buses, trains, planes, cars you are not behind the wheel of) where there is no network connection.

I just checked my (wifi-only, 16GB) iPad (with about 3 GB free on it at present). I have ~24 hours of music and podcasts (~4 GB), 6 hours of tv shows (~3 GB), an iOS programming course (~3 GB), 142 Books (in the Kindle app), and 8 games on it (~2 GB). None of them require a single bit of over-the-air data, because everything is synced to my ipad's internal storage. And if there's something I REALLY REALLY WANT, I have never been UNABLE to wait a few hours until a wifi signal is available, and download it then, onto the ~3GB of internal storage *still left* on the model of iPad with the *smallest* internal storage that they sell.

Could you explain to us exactly what sort of bus ride, train ride, plane ride, or car ride you're taking that would legitimately require MORE internal storage than that?

Or are you REALLY so disorganized that you can't manage to keep a few "current, interested in listening/watching/reading/playing these things" items on your tablet to keep you busy for 5-6 hours on a trip? And if you are... how exactly does an SD slot fix that problem? You'll just end up with a fucking empty SD slot which you forgot to load shit on for your long bus/plane ride, too.

Can this myth of "without removable storage your tablet is worthless" finally fucking die? PLEASE?

Re:Doomed competition

[symbolset]

These tablets have limited time to establish dominant mindshare. If Google subsidized each tablet $10 for 100 million tablets a year, that would be the$1B/yr level Microsoft is subsidizing Nokia. This isn't business any more, except to the extent that as always - business is war. The goal here is to kill the PC outright before Microsoft achieves their avowed goal of killing Google.