Google's Profit In Nexus 7 Is Just $15 Per Tablet

[RoBoGhOsT]

Google's Profit In Nexus 7 Is Just $15 Per Tablet

Google's first tablet has got a lot of interest due to the bargain-rate price of $199 it is being offered at . However many people have wondered does Google make sufficient profit selling the tablet at this price ? or is it being sold for cheap in order to gain a large customer base ?

Researchers have estimated the cost of Nexus 7 to Google to be just lower than the selling price tag of $199 . The cost of components and assembly of the tablet is estimated to be $184 per device by Research firm UBM TechInsights .

This leaves Google with a margin of just $15 per tablet , which is much lower than what Kindle Fire gives to Amazon - $46 per tablet . On the other hand Apple's iPad 2 costs $278 to manufacture and generates a massive profit of $171 per tablet .

The Nexus 7 has better hardware - better screen with higher resolution , which costs $49 compared to $35 of the rival . There is additional 1.2MP front camera and Bluetooth , GPS features as well . The powerful Tegra 3 chip that powers the Nexus 7 costs $7 more compared to the Kindle .

So how will selling tablet at lower margin help Google ?

The tablet will generate revenue through additional content from Play Store and services through advertising or downloadable content .

Source

 

[agantuk]

This is still better than the upfront loss that Amazon sold it for. It is another thing that Amazon probably earned through in store sales than Google has

 

[gREen]

ha ha, i once read a article that the,

price of all the parts of the iphone costs $188 whereas they sellin for $649

completeopposite , source

iPhone 4 Carries Bill of Materials of $187.51, According to iSuppli - IHS iSuppli?s® Teardown portal provides deeper insights into bill of materials, BOM cost, photo analysis and graphical representation of electronics. To learn more, call us at 1-31
and some pics
iphone 4 parts | Daily iPhone Blog

 

[asingh]

As of now it is halted in the States.

 

[Rahul++]

That's good initiative .. But profile will be much more as Nexus 7 is going to sell like in millions of numbers Suppose if Asus sells $5m of those, google will make $75m out of that. They are already making a huge profit with their other products. People are definitely gonna love Google for such a low price strategy, unlike Apple.

 

[whatsinaname]

As far as profit per device goes, Google's main aim with the flagship android devices is to drive OEMs and increase market share. Their aim is always on the ad revenue in the mobile space.

As of now it is halted in the States.

I think the Google Nexus phone is halted. The Nexus 7 is still available.

 

[Pat]

Well, I think this $15 profit is on sales of 16 GB model ($249). Andy Rubin mentioned that they get 0 profit out of sales from the 8 GB tablet which is why you will never see the 8 GB version on shelves of retail stores.

 

[vantheman5211]

the article pretty much downplays the amount google is going to earn via ads and services.they are literally everywhere in the internet sense and it clearly is more profitable than their hardware margin.

 

[thirumalkumaran]

if it sells....!!!!! else....?
another touchpad, playbook, fire in the making...?

 

[RoBoGhOsT]

^ it will definitely sell .. However, not sure about India yet as it depends on the price it launches here

 

[Sanav3]

Thats only the cost of hradware of each device.
We all seem to be conveniently skipping the R&D for hardware and marketing cost.

 

[agantuk]

if it sells....!!!!! else....?
another touchpad, playbook, fire in the making...?

Fire doesn't fit in that list.

 

[sharktale1212]

^^ second that. Fire sold well. It was partly responsible for Amazon's good showing last quarter.

 

[Aman27deep]

I've scrapped my plans to get a Tab 2 for this now. I'm sure over 100 people would get it from TE only

---------- Post added at 09:56 PM ---------- Previous post was at 09:55 PM ----------

15$ on 8 GB, so profits would be atleast 50$ on the 16 GB version.