Google Selling Nexus 7 At Cost To Promote Its Play Ecosystem

June 29, 2012 - 06:47 AM |
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We first saw an ASUS 7” tablet at CES 2012. That tablet would quickly drop off the radar only to emerge again at this year’s Google I/O developer conference as the Google Nexus 7. The Nexus 7 is a 7” tablet that closely resembles the original ASUS model but tweaks the case and knocks the price down to $199.

Specifications include a quad core Tegra 3 processor with 12-core GPU component, 8GB or 16GB of storage space, and 1GB of RAM. Other features include WiFi, NFC, and Bluetooth. Further, Google announced during its Day 1 keynote that the Nexus 7 weighs in at 340 grams and offers up to 9 hours of video playback time. All that hardware drives Android 4.1 Jelly Bean and an IPS display with resolution of 1280x800 resolution.

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All Things D talked with both ASUS CEO Jonney Shih and Google’s Andy Rubin about the new Google Nexus 7 tablet and how it came to be. Reportedly, ASUS had just four months to come up with a 7” tablet for Google that they could sell at cost for $200. Both of those added up to a tight time schedule with 24-hour development cycle and a tablet that was mostly similar to its CES tablet but at the lower Google price point. Dubbed Project A Team internally, ASUS added a number of new people to the tablet project and moved engineers around the work – including some postings in Silicon Valley so that they could work closely with Google. It also enabled ASUS to work around the clock on the hardware (albeit by different workers). Google has stated that ASUS was one of the few companies that could have pulled off the tablet in the short time frame given. AllThingsD quoted Google’s Andy Rubin as saying “We went from zero to working product in four months.”

On the ASUS side of things, Jonney Shih told the site that “our engineers told me it is like torture” regarding working with Google to develop the tablet. Also, he stated that Google can be a demanding company to work with. “They ask a lot.”

 

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Granted, ASUS had a good starting point with its 370T tablet that it showed off at CES, but the difficult part was taking that same tablet and making it cost less than $200. Google’s goal with that price point was to attempt to capture the mainstream market – a market that is currently buying into the Kindle Fire and Nook Tablet tablets (and accompanying ecosystems). Despite being based on Android, both Barnes and Noble and Amazon have heavily tweaked the interface and heavily tied the hardware into their content ecosystems. Google wants to do the same with its Play Store by releasing a tablet at cost on its Google Play Store that will run the latest – and bloatware-free – version of Android. The company is trying to position the Nexus 7 as the perfect tablet to consumer Play Music, Play Books, and Play Movies on. The hardware inside and out along with the latest Android OS do make it a very compelling option for people wanting a tablet with the form factor of the Kindle Fire but the full (and latest) stock version of Android. Both companies seemed to run into the Nexus 7, but in the end the pressure ASUS was under may have resulted in a "diamond in the (Android tablet) rough."

What do you think of the Nexus 7? Is it the Kindle Fire for the more tech savvy (and/or those not already heavilly invested in a competing media catalog like Itunes, Amazon Kindle, et al)?

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Source: AllThingsD
June 29, 2012 | 12:43 PM - Posted by TigerGD (not verified)

They can't be selling them "at cost" because 8GB of flash memory doesn't cost $50. They'll sell more 8GB models, so if those were sold at cost, the 16GB ones would net a profit.

June 29, 2012 | 03:26 PM - Posted by Anonymous (not verified)

You do realize that the cost of materials aren't the only factor determining the price right?

You still have the R&D costs, the marketing costs, the cost of utilities to make it, wages of the R&D department, wages of the financial department, wages of the marketing department, wages of the assembly line people, costs of building a new assembly line for these etc...

June 29, 2012 | 06:11 PM - Posted by Anonymous (not verified)

I think this is amazing what Google and Asus have done. The price is amazing with the amount of power this tablet will have. The Kindle Fire will either have to drop in price alot or be redisigned to even compete.

June 30, 2012 | 09:33 PM - Posted by Anonymous (not verified)

this isnt anywhere near what it's suppose to be..the original asus memo 370t had everything this tab had, 16gb memory, micro sd and a extra 8mp rear cam for 250dollars-.-

July 1, 2012 | 12:37 AM - Posted by klatch

Love it. Pre-ordered 2 of the 16GB model.

July 3, 2012 | 01:38 PM - Posted by castlefox (not verified)

I rather like the Nexus7 and I would totally buy one right now but I am remember like a month ago Linus Torvals was saying that NVidia is one of the worst company to work with in Linux. I wonder if Tegra was something that Nvidia is actually working with Linux. Since android runs linux, I think I am going to pass on the Nexus7 since it has a Nvidia chip.

July 4, 2012 | 02:45 PM - Posted by Tim Verry

Tegra is a good mobile chip, regardless of what Linus thinks of NVIDIA ;). He just wants NVIDIA to open source its drivers and that's just not going to happen any time soon heheh.

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